20% Upper Circuit: Stock skyrockets after board approves up to 45 lakh preferential warrant issue

SYNOPSIS: The board approved issuance of up to 45 lakh convertible warrants to promoters at Rs. 22.5 each, aiming for a fund raise via preferential allotment, subject to shareholder and regulatory approvals.

During Monday’s trading session, shares of a company involved in the manufacturing and dealing in casting, moulding and trading of steel and iron products, hit a 20 percent upper circuit on NSE, after its promoters to infuse funds via a Preferential Warrant Issue.

With a market cap of Rs. 30.6 crores, shares of Kalana Ispat Limited hit a 20 percent upper circuit at Rs. 23.5 on NSE, as against its previous closing price of Rs. 19.6. The stock has delivered negative returns of over 41 percent in one year, but has gained by around 23 percent in the last one month.

News

As per its latest regulatory disclosures, the Board of Kalana Ispat Limited approved a proposal to issue up to 45,00,000 convertible equity warrants to members of the Promoter and Promoter Group category on a preferential basis.

Each warrant will entitle the holder to subscribe to one equity share at a price of Rs. 22.5 per warrant (including the warrant subscription price and warrant exercise price), or a higher price as determined in accordance with SEBI ICDR (Issue of Capital and Disclosure Requirements) Regulations. The total fundraise through this preferential issue is proposed to be up to Rs. 10.125 crore.

The issuance is subject to shareholder approval at an upcoming Extraordinary General Meeting (EGM) and other necessary regulatory approvals. The transaction will be carried out in compliance with the Companies Act, 2013, SEBI ICDR Regulations, SEBI Listing Regulations, and other applicable laws and rules.

Additionally, the Board approved the proposal to increase the existing borrowing limits of Kalana Ispat Limited from Rs. 50 crores to Rs. 100 crores, subject to approval of the shareholders of the company.

Financials

Kalana Ispat reported a decline in consolidated revenue from operations of around 10 percent YoY, from Rs. 27.6 crores in H1 FY25 to Rs. 24.87 crores in H1 FY26. Likewise, its net profit decreased during the same period from Rs. 0.7 crores to Rs. 0.01 crores, representing a fall of around 99 percent YoY.

Kalana Ispat Limited is primarily engaged in the business of manufacturing and dealing in casting, moulding and trading of steel and iron products and the sale of services (Job work). It is primarily engaged in the manufacturing of Mild Steel (MS) Billets and Alloy Steel Billets of various grades. Presently, the company have a production capacity of 38,000 MT per annum.

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