Servotech Power issues warrants of preferential basis; stock trades flat

Servotech Power Systems Ltd has announced issuance of convertible warrants on a preferential basis to select investors belonging to promoter and non-promoter category of investors. The company board approved the issue of warrants on Saturday, November 11 and it informed the same through exchange filing.

NSE-listed Servotech Power has issued 90 lakh warrants at an issue price of Rs 82 per warrant in cash for an aggregate consideration of Rs 73.8 crore. Each warrant carries a right to subscribe to one equity share of the company with a face value of Re 1 each.

Preferential allotment on a private placement basis in accordance with the provisions of the Companies Act, 2013 and the rules made thereunder and SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018, as amended (ICDR Regulations) and other applicable laws, said the company in the exchange filing.

Alongwith with Raman Bhatia, the promoter of Servotech Power, other investors Eminence Global fund PCC- EUBILIA Capital Partners Fund, AG Dynamic Funds, Miverwa Ventures Funds, Forbes EMF, Coeus Global Opportunities were issued with warrants by the company board.

The tenure of the warrants shall not exceed 18 months from the date of allotment. Each warrant shall carry a right to subscribe one equity share per warrant, which may be exercised in one or more tranches during the period commencing from the date of allotment of warrants until the expiry of 18 months from the date of allotment of the warrants, said the filing.

An investor needs to pay 25 per cent of the amount at the time of allotment and the remaining amount shall be paid at the time of conversion of warrants. However, if any allottee fails to convert the warrants within a period of 18 months, the unexercised warrants shall lapse and the amount paid by the warrant holders on such warrants shall stand forfeited by the company.

Shares of Servotech Power Systems were trading maringally lower at Rs 76.85 compared to its previous close at Rs 77.55. The company was commanding a total market capitalization close to Rs 1,650 crore. THe stock has delivered about 600 per cent return from its 52-week low at Rs 12.55.

Servotech's profit after tax surged over 300 per cent on a year-on-year (YoY) basis to Rs 3.12 crore in the September 2023 quarter, compared to a bottomline of Rs 0.78 crore in the year ago period. Its revenue from operation surged more than 114 per cent to Rs 85.93 crore in the second quarter of the ongoing financial year.

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