Bannari Amman Spinning Mills Unveils Capital Infusion Plan via ₹36 Warrants

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Capital Strategy Update: Bannari Amman Spinning Mills Ltd has pursued a major capital-raising strategy by issuing a maximum of 4.2 million convertible warrants at ₹36 per warrant. This has been pursued with an aim to injecting a boost to the financial resources of the company and enabling it to achieve its operating and strategic objectives.

Important Notices:

The Board of Directors approved the issue of 42,25,806 convertible warrants of face value of ₹5 each.

The issue price of ₹36 a warrant has a premium element, an indication of investor faith in the long term of the firm.

These warrants will be issued on a priority basis to eligible investors subject to approval by shareholders and regulators.

Purpose and Use:

The proceeds from exercising the warrants will be used to fund working capital requirements, repayment of debt, and general corporate needs.

The infusion of capital will also allow the firm to weather market volatility and make investments in the modernization of its textile business.

Investor Implications:

At conversion, the warrants will be converted into equity shares, which may also alter the shareholding pattern.

The step is viewed as an anticipatory measure to improve the leverage ratios of the company and improve liquidity.

It may also reflect management's confidence in the company's turnaround strategy following recent enhancements in profitability.

Market Environment:

Bannari Amman Spinning Mills has been focusing on operational excellence and product diversification amidst the backdrop of a distressed textile industry scenario.

The company recently reported a return to profitability in the March 2025 quarter, reversing earlier losses.

The case of warrants arises when there is a slight variation in promoter shareholding, and the company is trying to establish investor trust.

Sources: Capital Market Live, Tickertape, Trendlyne, Fortune India, BSE Corporate Filings