Shree Ram Urban Infra goes to court over fund raising issue
The Kasliwal family, S Kumar’s Group-promoted Shree Ram Urban Infrastructure (SRUI) on May 18 had proposed a warrants issue of 2.5 crore shares. However, the company’s minor shareholders have now expressed their concerns over the allotment of 2.5 crore shares to the promoters and instead want a rights issue so that they can also subscribe to it. CNBC-TV18’s Priyanka Ghosh reports.
The Sebi average price for the company works out to be about Rs 80 per share. Shareholders say that they should also be allowed to take part in the profits the promoters will be making and has referred the matter to the Company Law Board (CLB). We have obtained a copy of the CLB order, which is in support of the minority shareholders, and SRUI has now approached the Bombay High Court (HC).
In its petition to the court, the company has said that the preferential allotment is it is in urgent need of Rs 50 crore. The petition also points out that various rights issues — of mostly real estate companies — have been unsuccessful and says that some of its peers like HDIL, Unitech, Sobha Developers and Indiabulls Real Estate have also announced preferential allotment. However, it also known that only HDIL and Unitech are companies that have announced preferential allotment.
In current market conditions, the company feels a better way to raise funds would be via the preferential allotment route rather than through a rights issue since the former is a more reliable way.
The High Court has said that the company can go ahead with its annual general meeting on June 24 but cannot go forward with result.