MRC Agrotech Revises Preferential Issue Fund Utilization Plan
MRC Agrotech Ltd has significantly revised its preferential issue fund utilization strategy, removing borrowing repayment component and reallocating ₹313.30 lakhs for working capital requirements and ₹100.00 lakhs for future funding including R&D facility setup at Belapur, product launches, and expansion into nutraceuticals and soil health management products.
*this image is generated using AI for illustrative purposes only.
MRC Agrotech Ltd has filed an application with BSE Limited seeking in-principle approval for a preferential issue of equity shares under Regulation 28(1) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The company has applied to issue 21.97 lakh equity shares for cash and 86.42 lakh shares for non-cash consideration on a preferential basis.
Preferential Issue Structure
The company proposes to issue equity shares in two tranches through preferential allotment. The issue comprises both cash and non-cash components, with specific allocations for different investor categories.
| Component | Number of Shares | Consideration Type | Issue Price per Share |
|---|---|---|---|
| Cash Issue | 21,97,910 shares | Cash | ₹19.50 |
| Non-Cash Issue | 86,42,097 shares | Other than cash | ₹19.50 |
| Total Issue | 1,08,40,007 shares | Combined | ₹19.50 |
The issue price of ₹19.50 per share includes a face value of ₹10.00 and a premium of ₹9.50 per share. This pricing is determined based on the floor price calculated according to Chapter V of the SEBI ICDR Regulations, with May 29, 2025, as the relevant date.
Revised Fund Utilization Plan
The company has issued a disclosure under Regulation 30 on December 11, 2025, significantly revising the utilization of preferential issue proceeds. The Board of Directors decided that no part of the preferential issue proceeds will be utilized towards repayment or pre-payment of borrowings, as all outstanding short-term obligations were repaid from internal accruals prior to June 2025.
| Object of Utilisation | Amount (₹ in Lakhs) | Expected Time of Utilisation |
|---|---|---|
| Working Capital Requirement | 313.30 | By December 2025 |
| Future Funding Requirements | 100.00 | 6-12 months |
| General Corporate Purposes | 15.29 | By September 2025 |
| Repayment/Pre-payment of Borrowings | Nil | Not Applicable |
Working Capital Deployment Strategy
The incremental working capital requirement of ₹313.30 lakhs is based on CMA workings prepared using the last 3 years audited financials. The deployment is planned between October 2025 and December 2025.
| Purpose | Amount (₹ in Lakhs) | Deployment Period |
|---|---|---|
| Purchase of raw materials | 120.00 | Oct-Nov 2025 |
| Payment to trade creditors | 75.00 | Oct 2025 |
| Advance to channel distributors | 25.00 | Nov 2025 |
| Employee benefits & statutory dues | 20.00 | Nov-Dec 2025 |
| Clearing operational liabilities | 73.30 | Dec 2025 |
| Total | 313.30 | By Dec 2025 |
Future Funding Requirements
An additional ₹100.00 lakhs has been earmarked for future funding requirements, specifically focusing on R&D facility setup, product launches, and expansion into nutraceuticals.
| Activity | Amount (₹ in Lakhs) | Timeline |
|---|---|---|
| Integration & regulatory costs for MARSAPI acquisition | 25.00 | By Jan 31, 2026 |
| Setting up pilot R&D facility at Belapur | 30.00 | Feb-Mar 2026 |
| Product launch expenses | 20.00 | Apr 2026 |
| Nutraceuticals & soil health expansion | 25.00 | By Jun 30, 2026 |
| Total | 100.00 | Oct 2025-Jun 2026 |
R&D Facility Development
The company plans to establish a pilot R&D facility at Belapur, Thane, with an estimated cost of ₹30.00 lakhs. The facility will focus on bio-formulation development and include specialized equipment for fermentation, sterilization, analytical testing, and processing.
| Equipment Category | Estimated Cost (₹) | Purpose |
|---|---|---|
| Fermentation Culture Development | 6,00,000 | Microbial culture growth |
| Sterilization & Aseptic Handling | 3,00,000 | Media sterilization |
| Analytical & Quality Testing | 4,00,000 | QC analysis |
| Processing & Formulation | 4,00,000 | Blending operations |
| Microbiology Support | 3,00,000 | Microbial analysis |
| Equipment Total | 20,00,000 | Complete setup |
| Lab-Scale Trials | 10,00,000 | Pilot testing |
Non-Cash Component - Acquisition Strategy
The non-cash component of 86,42,097 shares, aggregating to ₹16,85,20,896, is intended for the acquisition of 100% shareholding in MARSAPI Lifesciences Private Limited. This share swap arrangement involves issuing company shares to the existing shareholders of the target company as consideration for their equity stakes.
Authorized Capital Enhancement
To accommodate the preferential issue, the company proposes to increase its authorized share capital from ₹20,50,00,000 to ₹35,50,00,000, divided into 3.55 crore equity shares of ₹10 each. This increase requires amendments to the Memorandum and Articles of Association.
Regulatory Compliance
The preferential issue is subject to various regulatory approvals and compliance requirements. The company has obtained valuation reports from registered valuers and ensured compliance with SEBI ICDR Regulations. The equity shares proposed for allotment will be subject to lock-in periods as specified under Chapter V of the SEBI ICDR Regulations.
The allotment is expected to be completed within 15 days from the date of passing the special resolution by members, subject to receipt of necessary regulatory approvals. The company has undertaken to maintain transparency in disclosures and ensure utilization of proceeds strictly in line with applicable SEBI ICDR Regulations.
Historical Stock Returns for MRC Agrotech
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| 0.0% | -0.40% | +10.36% | +122.33% | +224.16% | +990.87% |
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