Shankara raises Rs.105 Crs from APL Apollo Mart Ltd. via preferential issue of share warrants

Shankara Building Products Limited (BSE:540425) (NSE:SHANKARA) announced today that the board has approved the issue of preferential share warrants worth Rs.105 Crs to APL Apollo Mart Ltd. (a wholly-owned subsidiary of APL Apollo Tubes Limited).

The Company has approved the preferential issue of 14,00,000 share warrants convertible into equity shares (which is 5.77% of fully diluted capital upon conversion) for an offered price of Rs.750 per warrant to APL Apollo Mart Ltd. (a wholly-owned subsidiary of APL Apollo Tubes Limited).

Investment Highlights

- Total investment size of up to Rs.180.5 Crs

- APL Apollo will Immediately invest Rs. 101.8 Crs(Secondary market purchase +25% warrant subscription money) & Remaining investment of Rs 78.7 Crs within 18 months (75% on warrant conversion)

- The total holding of Apollo Mart in Shankara after the issue of the warrants will be 9.90% on a fully diluted basis

Investment Rationale

- Synergy: Shankara being a key distributor of APL Apollo's products, this transaction ensures consistency in the supply chain

- Working Capital Optimisation: Part of the proceeds will be utilized to fund working capital which in turn will improve operational cash flows

APL Apollo Tubes Ltd (APL Apollo), India's leading branded structural steel tube manufacturer. APL Apollo's multi-product offerings include over 1,500+ varieties for multiple building material structural steel applications. With state-of-the-art manufacturing facilities, APL Apollo serves as a 'one-stop shop' for a wide spectrum of tubular products, catering to an array of industry applications such as urban infrastructure and real estate, rural housing, commercial construction, greenhouse structures, and engineering applications.

Shankara Building Material Products Managing Director Sukumar Srinivas, "We are grateful to APL Apollo for their strong endorsement of Shankara's strategic vision. We are happy to extend the long-standing business association with them. We believe the association will create strong synergies for Shankara Building products Ltd and APL Apollo."

Shares of Shankara Building Products Limited was last trading in BSE at Rs. 813.25 as compared to the previous close of Rs. 801.65. The total number of shares traded during the day was 40859 in over 1661 trades.

The stock hit an intraday high of Rs. 829.95 and intraday low of 795.95. The net turnover during the day was Rs. 33300778.00.

Source : Equity Bulls

Keywords

ShankaraBuildingProducts INE274V01019 PreferentialIssue ShareWarrants APLApolloMart APLApolloTubes