Rights Issue: Shares of this small-cap iron ore company rallied over 15 per cent on July 26

This surge has come on the back of the rights issue of equity shares, for which the ex-date is today.

The shares of Sandur Manganese and Iron Ores Ltd (SMIORE), an S&P BSE Small-Cap company, are buzzing on the bourses today. As of 12.10 pm, the company’s share price has appreciated by 17.33 per cent. This rally has come on the back of the rights issue of equity shares. The ex-date for this corporate action is today, ie., 26 July 2022.  

In contrast, the S&P BSE SmallCap index is down by 0.69 per cent or 183.71 points to the level of 26,555.43.  

To give a perspective, a rights issue is an invitation to the existing shareholders to buy additional new shares in the company. With the help of this provision, the shareholders can buy new shares at a discount to the market price on a stated future date.  

In this case, the Board of Directors of SMIORE had considered and approved the issue of 1,80,03,882 fully paid-up equity shares of the face value of Rs 10 each on Rights Basis at a price of 10 per rights equity share aggregating to Rs 18,00,38,820 in the ratio of 2 Rights Equity Shares for every 1 Equity Share held as on Record Date (27 July 2022). 

Sandur Manganese & Iron Ores Ltd (SMIORE) is engaged in mining of finest low-grade, low phosphorous, manganese and iron ores, facility for production of ferroalloys and management of hydro-electric power generation. Reserves in the company’s lease area are estimated at 40 million tonnes (Mt) of low-grade iron ore, about 8 Mt of low-grade manganese ore and nearly 100 Mt of BHQ, keeping the scope of expansion alive.