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In a significant development for Kothari Industrial Corporation Ltd (KICL), the Board of Directors met on August 26, 2025, and approved a preferential issuance of equity shares aimed at raising approximately ₹35.4 crore. This strategic move focuses on raising capital from non-promoter investors and marks a critical step in the company’s efforts to reinforce its financial position and support future growth initiatives.
Key Highlights of the Preferential Issue:
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The board sanctioned the issuance of 17,11,068 equity shares, each with a face value of ₹5.00. The shares will be issued at an attractive price of ₹207 per share, which includes a premium of ₹202 per equity share.
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The total amount expected to be raised through this preferential issue stands at ₹35,41,91,076.
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These shares are to be allotted exclusively to non-promoter investors in accordance with SEBI’s (Issue of Capital and Disclosure Requirements) Regulations, 2018, as amended. This ensures a clear regulatory framework governs the transaction with transparency and compliance.
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An approved draft notice has been prepared for seeking shareholder consent, a necessary step before the final execution of this preferential allotment.
Details on Investor Participation:
The preferential share offer will be extended to a group of 24 non-promoter investors. Some of the notable individual allocations include:
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D Purushothaman with 400,000 shares
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Natarajan with 280,000 shares
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A R Foundations with 250,000 shares
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A Cletus with 250,000 shares
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Parimala Krishnamurthy with 100,000 shares
Post-issuance, these investors will have varying stake percentages in the company, contributing to a more diversified ownership structure.
Regulatory and Compliance Aspects:
The issuance follows the regulatory norms stipulated under SEBI ICDR regulations to maintain transparency and equitable treatment of investors. The company will fully comply with disclosure requirements under Regulation 30 of the Listing Regulations, including details of the investors and the shareholding pattern post-issue. The approval of this share issue is conditioned on formal consent from existing shareholders during the upcoming Annual General Meeting (AGM).
Other Board Approvals and Strategic Decisions:
Apart from the preferential equity issuance, the Board also approved the draft notice for the AGM, set to be conducted via Video Conferencing/Other Audio-Visual Means (VC/OAVM). This AGM will seek shareholder approval for this issuance along with other key agenda items.
Further, the Board re-appointed Mr. Rafiq Ahmed as the Executive Chairman and Managing Director for a term of three years, effective from September 28, 2025. This decision underscores the company's commitment to stable leadership and experienced management as it navigates its expansion and financial strengthening plans. Mr. Ahmed’s expertise, particularly in the fertilizers sector, aligns with KICL’s aspiration to grow across varied business verticals.
Market Context and Forward Outlook:
Kothari Industrial Corporation has shown strong market performance historically, with extraordinary returns over five years. This capital infusion is expected to bolster the company’s operational capabilities, support existing and new projects, and improve financial metrics on a sustained basis. The preferential share issue also diversifies funding sources and enhances investor confidence in a structured manner.
In summary, Kothari Industrial Corporation’s preferential equity share issuance approved on August 26, 2025, is a pivotal step towards financial consolidation and strategic growth. The company’s transparent regulatory compliance, enriched investor base, and reaffirmation of key leadership set a promising tone for its future trajectory.
Source: ScanX, Business Standard
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