Leading IT firm Sylph Technologies, a small cap stock, has announced preferential issue not exceeding Rs 0.83 million. According to an exchange filing, it has offered 26 crore equity shares to the investors belonging to non promoters and public categories. The preferential issue is offered at a price of Rs 3.20 apiece.
What Is Preferential Issue?
Preferential issue is a corporate event. It is a method to raise funds from the market by issuing warrants to the shareholders. Under The Companies Act, 2013, listed companies can raise funds via methods like preferential allotment, right issue, sweat equity shares among others.
In a preferential issue of shares, the participating company makes bulk allotment of fresh shares to its investors. The entire process is termed as the preferential allotment of shares.
"...to create, issue and allot up to 26 crore fully convertible warrants, carrying a right exercisable by the warrant holder to subscribe to one equity share having face value of Re 1 per warrant at an issue price of Rs 3.20 per warrant," Sylph said in the filing on BSE.
The filing added that the board has also approved that issuance and allotment of equity shares for another aggregate amount not
exceeding Rs 100 crore by way of QIP’s or any other method including series of Right Issue, each tranche not exceeding Rs 50 crore.
A rights issue is also a type of corporate event that allows a company's existing shareholders to purchase extra shares in proportion to their existing holdings at a discount price.
According to exchange data, shares of the micro cap company have given a multibagger return of 108 per cent to its shareholders in the past 1 year. In two years, it has delivered ax extraordinary return of more than 700 per cent.
Sylph Technologies provides software development services and solutions such as web development, product development, offshore software development, e-commerce for web and mobile enablement among others.
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