NewsCorporate ActionsVisa Steel Secures Board Approval for ₹200 Crore Fundraising via Convertible WarrantsVisa Steel Secures Board Approval for ₹200 Crore Fundraising via Convertible Warrants
Visa Steel Limited's Board of Directors has approved the issuance of up to 5 crore convertible warrants at ₹40 each to raise ₹200 crore. The warrants, convertible into equity shares within 18 months, will be allotted to VISA Industries Limited (Promoter Group). This move could increase VISA Industries' stake from 14.33% to 40.17% upon full conversion. The preferential issue is subject to regulatory approvals and shareholder consent at an upcoming Extraordinary General Meeting.
*this image is generated using AI for illustrative purposes only.
Visa Steel Limited, a prominent player in the steel industry, has announced a significant move to bolster its financial position. The company's Board of Directors has given the green light to raise funds through the issuance of convertible warrants, marking a strategic step in its capital allocation plans.
Key Details of the Fundraising Initiative
| Aspect | Details |
|---|---|
| Instrument | Convertible Warrants |
| Number of Warrants | Up to 5,00,00,000 (Five Crore) |
| Face Value | ₹10 per Equity Share |
| Issue Price | ₹40 per Warrant |
| Total Fundraising | Up to ₹200 Crore |
| Conversion Ratio | 1 Warrant : 1 Equity Share |
| Allottee | VISA Industries Limited (Promoter Group) |
| Conversion Period | Within 18 months from allotment |
Terms of the Preferential Issue
The Board has approved the preferential issue of up to 5 crore convertible warrants, each convertible into one fully paid-up equity share of the company. The warrants will be issued at a price of ₹40 each, payable in cash, with the potential to raise up to ₹200 crore.
Warrant Exercise Mechanism
- Warrant holders can exercise their rights within 18 months from the date of allotment.
- A minimum of 25% of the warrant exercise price is payable at subscription.
- The remaining 75% is due at the time of converting warrants into equity shares.
Impact on Shareholding
| Shareholder | Pre-Issue Holding | Warrants Issued | Post-Issue Holding* |
|---|---|---|---|
| VISA Industries Limited | 16,590,000 (14.33%) | 50,000,000 | 66,590,000 (40.17%) |
*Assuming full conversion of warrants
Regulatory Compliance and Approvals
The preferential issue is subject to necessary statutory and regulatory approvals, including:
- Compliance with SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018
- Approval from the company's shareholders
- Other required permissions and sanctions
Next Steps
- An Extraordinary General Meeting (EGM) is scheduled to seek shareholder approval.
- The EGM will be conducted through video conferencing/other audio-visual means.
- The notice for the EGM will be sent electronically to shareholders with registered email addresses.
This fundraising initiative through convertible warrants demonstrates Visa Steel's proactive approach to strengthening its capital structure. The move is likely aimed at supporting the company's growth plans and operational needs in the dynamic steel industry landscape.
Investors and market watchers will be keenly observing how Visa Steel utilizes these funds and the potential impact on the company's future performance and market position.
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