Back-to-Back Upper Circuit Stock: This Micro-cap Construction Company to Issue 17.9 million Warrants At Rs 36 Each; Stock Price Locked in 2 per cent Upper Circuit!

With a market capitalisation of Rs 70.4 crore and a PE ratio of 4.03x, the company trades at a discount compared to the industry PE of 28.4x.

RDB Real Estate Constructions Limited has announced key financial and strategic decisions, including an increase in authorized share capital and the issuance of convertible share warrants. The company has also scheduled an Extraordinary General Meeting (EGM) to seek shareholder approval for these proposals.

The Board has approved an increase in the company’s authorized share capital from Rs. 19 crore to Rs. 38 crore. This will involve raising the number of equity shares from 1.9 crore shares of Rs. 10 each to 3.8 crore shares of Rs. 10 each. The proposed increase is subject to approval from the company's shareholders in the upcoming general meeting.

The Board has also approved the issuance and allotment of up to 1.79 crore convertible warrants in one or more tranches. Each warrant, with a face value of Rs. 10, will be issued at Rs. 36 per warrant, including a premium of Rs. 26. This preferential allotment will be made to select investors from both promoter and non-promoter categories, raising a total of Rs. 64.72 crore. 

Among the key allottees in the promoter group, Kusum Devi Dugar will receive 9 lakh warrants, Sheetal Dugar 18.3 lakh, Vinod Dugar 14 lakh, and Yashaswi Dugar 17 lakh. Other promoter group entities, including Ankur Constructions Pvt Ltd., Somani Estate Pvt Ltd., and Veekay Apartment Pvt Ltd., will receive significant allotments. Several public investors, including Vansikha Vishal Surana, Sanjay Babulal Surana, and Vishal Sanjay Surana, are also participating in the preferential issue.

The Board has approved the dispatch of notices for an EGM, where shareholders will vote on the proposals, including the share capital increase and issuance of convertible warrants. CS Prachi Todi, a practicing company secretary, has been appointed as the scrutinizer to oversee the e-voting and voting process.

The company has outlined that the funds raised from this issuance will be primarily used for loan repayments and land acquisitions for future development projects.

RDB Real Estate Constructions Ltd. is currently trading at Rs 41.57, marking a 1.99 per cent increase from its previous close of Rs 40.76. The stock has recorded a new 52-week high of Rs 41.57 today, indicating strong upward momentum.

With a market capitalisation of Rs 70.4 crore and a PE ratio of 4.03x, the company trades at a discount compared to the industry PE of 28.4x. The company has ROCE of 5.35 per cent and ROE of 12.8 per cent. In the last one month, the shares of the company have given multibagger returns of 140 per cent in one month and locked in a 2 per cent upper circuit for the last 22 trading sessions.

Investors should keep an eye on this micro-cap stock.

Disclaimer: The article is for informational purposes only and not investment advice.