Byke announces preferential allotment

The Company has announced –

  • Up to 1,25,00,000 (One crore twenty five lakhs) fully convertible equity warrants convertible into equivalent number of Equity Shares of the Company having face value of Rs. 10/- each, at a Premium of Rs 35/- per Warrant, aggregating up to Rs. 56.25 cr
  • 25% of the consideration shall be payable at the time of allotment of warrant and the balance 75% on the exercise of options against each such warrant within 18 months of the allotment.
  • The allottees include both the promoters (46,50,000 warrants) and the non promoters (78,50,000 warrants).
    • Promoters currently own 46.85% of the Company. Therefore, assuming everything else remains same, post full conversion, promoters stake will dilute to 42%. However, that’s a simplistic calculation only for reference as there are many ifs and buts.
  • EGM has been fixed on December 7, 2023 to seek shareholders’ approval for the preferential issue.

Given that the current market cap of the Company is around 200 cr, this can be considered a significant capital raise.

Whether it’s only to create excitement or there is a long term strategic vision around the raise, remains to be seen.

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