Star Housing Finance Limited (STARHFL) held its 20th Annual General Meeting (AGM) on September 26, where shareholders approved several key corporate actions, including a significant increase in the company's authorized share capital and a rights issue.

Key Highlights of the AGM

Capital and Share Structure

• Shareholders approved raising the authorized share capital from Rs. 50.00 crore to Rs. 125.00 crore
• The increase involves creating an additional 15 crore equity shares of Rs. 5.00 each, bringing the total to 25 crore equity shares
• Clause V of the company's Memorandum of Association was amended to reflect this change

Financial Decisions

• A final dividend of Rs. 0.10 per equity share was approved
• Members authorized borrowing limits up to Rs. 1000.00 crores
• Approval for asset sale/securitization up to Rs. 100.00 crores was granted

Rights Issue

The Rights Issue Committee approved a Rs. 98.27 crore rights issue with the following details:

Term Loan from State Bank of India

Star Housing Finance Limited secured a Rs. 50.00 crore term loan sanction from State Bank of India. This loan is intended to:

• Augment lending capacity
• Strengthen the company's asset-liability profile

Additional Resolutions Passed

1. Adoption of audited financial statements
2. Re-appointment of Mr. Kalpesh Rajendra Dave as a director
3. Appointment of M/s. D. M. Zaveri & Co as the Secretarial Auditor
4. Increase in borrowing powers under Section 180(1)(c) of the Companies Act, 2013
5. Approval for creation of charges on company assets to secure borrowings
6. Increase in managerial remuneration for Mr. Kalpesh Rajendra Dave, Executive Director & CEO

Company Operations

Star HFL operates in the affordable housing finance sector across multiple states in India, including Maharashtra, Madhya Pradesh, Gujarat, Rajasthan, NCR, and Tamil Nadu.

These corporate actions, including the capital increase, rights issue, and term loan, position Star Housing Finance Limited for potential expansion and provide the company with additional flexibility in its operations and strategic initiatives.

Star Housing Finance Limited (SHFL) has announced the terms of its upcoming rights issue, aiming to raise up to Rs. 99.00 crores to bolster its capital base. The company plans to issue 6,14,16,404 fully paid-up equity shares at Rs. 16.00 per share, which includes a premium of Rs. 11.00 per share.

Rights Issue Details

Key Highlights

• The rights issue will increase SHFL's outstanding equity shares from 7,89,63,948 to 14,03,80,352, assuming full subscription.
• Eligible shareholders can trade their rights entitlements on the stock market until October 27, 2025.
• The company has arranged for the rights entitlements to be credited to shareholders' demat accounts before the issue opening date.

Financial Impact

The rights issue is set to inject significant capital into Star Housing Finance Limited, potentially strengthening its financial position in the housing finance sector. The additional funds could be utilized for expanding the company's loan portfolio, improving operational efficiency, or exploring new growth opportunities.

Management's Perspective

Kalpesh Dave, Executive Director & CEO of Star Housing Finance Limited, signed off on the rights issue announcement, indicating the management's commitment to this capital-raising initiative. The company views this as a strategic move to enhance its market position and create value for shareholders.

Investor Considerations

Shareholders of SHFL should note the following:

• The rights issue provides an opportunity to increase their stake in the company at a predetermined price.
• Those not wishing to subscribe can sell their rights entitlements in the market.
• The issue price of Rs. 16.00 per share offers a premium over the face value, reflecting the company's growth prospects.

Conclusion

Star Housing Finance Limited's Rs. 99.00 crore rights issue represents a significant development for the company and its shareholders. As the housing finance sector continues to evolve, this capital infusion could play a crucial role in SHFL's future growth and market positioning. Investors are advised to review the detailed terms in the Letter of Offer, which will be filed with BSE Limited and SEBI, before making investment decisions.