In a strategic move to strengthen its financial position, Mercury EV-Tech Limited, an emerging small-cap company in the electric vehicle sector, has received the green signal from its Board to proceed with a rights issue of preference shares and convertible warrants. Have found it.
This important decision, formally taken during the board meeting on Friday, September 13, was disclosed in the company’s latest filing with the Bombay Stock Exchange (BSE), generating considerable interest in the market. Riding the wave of this announcement, shares of Mercury EV-Tech closed at Rs 96.92, up 4.94% from Rs 92.36 in the previous session.
The timing of the rights issue announcement, issued after market close, underlines the company’s intention to capture momentum and generate excitement among investors. Revealing details of the rights issue, Mercury EV-Tech is gearing up for a significant capital investment. It is eyeing to raise about ₹480 crore through an adventurous rights issue comprising preference shares and convertible warrants.
The board has given the green signal to issue of 1.57 crore (1,57,41,000) equity shares, each share is worth ₹75. This pricing breaks down to a nominal face value of ₹1 per share, which is further enhanced by a hefty premium of ₹74, taking the total valuation of this share issuance to approximately ₹118.05 crore.
In a strategic manoeuvre detailed in its recent filing, Mercury EV-Tech has outlined a plan to issue 1,57,41,000 equity shares at a price of ₹75 per share. The move symbolizes the company’s firm stance on capital expansion, poised for significant growth in a dynamic market environment.
Building on this ambitious capital strategy, the Board also approved the issuance of 4.83 crore (4,83,00,000) convertible warrants, each having a face value of ₹75.
These warrants, which can be converted into fully paid-up equity shares at a premium of ₹74 per share, will take the total fundraising to ₹362.25 crore. As the company said,
“Issue of 4,83,00,000 convertible warrants of the company at a price of ₹75 per warrant, each warrant being one fully paid-up equity share of the company with face value of ₹1 at a premium of ₹74 per share.” which will be convertible or exchangeable into INR, not exceeding in the aggregate ₹362.25 crore for the proposed allottees.”
A strategic requirement has been placed for warrant issuance: the proposed allottees will have to make an upfront payment of 25% of the total issue size. This not only reflects Mercury EV-Tech’s systematic approach to capital acquisitions but also ensures a strong alignment between investor commitments and the company’s financial objectives, paving the way for strong future endeavors.
Eyes on next board meeting The story is not over yet; Mercury EV-Tech is gearing up for another important board meeting to be held on October 12, 2024. This meeting is going to be more than just a formality, it is where the company will delve deeper into the discussions and seek critical shareholder approval for the rights issue.
This meeting could very well prove to be a turning point, potentially opening up new avenues for expansion and strengthening Mercury EV-Tech’s foothold in the highly competitive electric vehicle industry. Mercury EV-Tech’s bold approach to raising capital speaks volumes for its ambitions.
The company is clearly positioning itself to expand operations and take advantage of the myriad opportunities in the rapidly changing EV landscape. With the strategic investment of the new fund, Mercury EV-Tech is not just preparing for incremental growth.
It is paving the way for a future defined by cutting-edge innovation and accelerated expansion in the fast-paced, ever-evolving field of electric vehicles. Investors and industry analysts will be watching this closely and will be eager to see how this financial strategy will impact Mercury EV-Tech’s market position and drive its business forward.
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