Umiya Tubes Plans Major Expansion with Rs. 43.70 Crore Fundraise and New Business Line

Umiya Tubes Limited has announced significant changes to its business strategy and capital structure, as outlined in an addendum to its Extraordinary General Meeting (EGM) notice scheduled for August 8, 2025. The company plans to raise approximately Rs. 43.70 crore through a preferential issue of equity shares and convertible warrants, primarily to fund its entry into the tungsten-based products business.

Key Highlights of the EGM Agenda

1. New Business Venture: Umiya Tubes is set to diversify its operations by adding a new business line focused on tungsten-based products. This expansion will cover various sectors including automotive, industrial, aerospace, defense, oil & gas, outer-space, nuclear, medical, and railways.

2. Capital Raising: The company proposes to issue:

   • 29,50,000 equity shares at Rs. 23.00 per share
   • 55,00,000 convertible warrants at Rs. 23.00 per warrant
   • An additional 1,05,50,000 convertible warrants at Rs. 23.00 per warrant

3. Increase in Authorized Share Capital: Umiya Tubes plans to increase its authorized share capital from Rs. 20.00 crore to Rs. 30.00 crore to accommodate the new share issuance.

4. Board Appointment: The company seeks to confirm the appointment of Ms. Khyati Viral Ranpura as a Non-Executive Professional Director for a term of five years.

Fundraising Details

The total fundraising of Rs. 43.70 crore will be conducted in phases:

All proposed allottees are non-promoters, and the warrants have an 18-month exercise period with a 25% upfront payment required.

Strategic Rationale

Umiya Tubes' decision to enter the tungsten-based products market is driven by the material's wide range of applications in high-tech industries. Tungsten is valued for its use in cemented carbides, lighting, electronic components, and various alloys for specialized applications.

Impact on Shareholding

Post-issue, assuming full conversion of warrants, the shareholding structure is expected to change as follows:

Conclusion

The proposed changes represent a significant strategic pivot for Umiya Tubes Limited. By entering the tungsten-based products market and substantially increasing its capital base, the company is positioning itself for growth in high-tech manufacturing sectors. Shareholders will have the opportunity to vote on these proposals at the upcoming EGM on August 8, 2025.

Investors and stakeholders should note that the success of this new venture will depend on various factors, including market demand, technological capabilities, and effective execution of the business plan. As always, it is advisable to conduct thorough research and consider one's risk tolerance before making investment decisions.