A Strategic Move to Reduce Debt and Boost Growth
Patel Integrated Logistics, a prominent player in the logistics and supply chain sector, has unveiled plans to raise Rs 9 crore through a rights issue. This strategic financial move, which was confirmed by the company’s board of directors on August 28, 2024, aims to strengthen the company’s balance sheet and support its long-term growth objectives.
The rights issue is set to be offered at a price of Rs 18 per equity share, which includes a premium of Rs 8. Shareholders will have the opportunity to purchase eight new shares for every 103 shares currently held. This offer is designed to be attractive to investors, as it is priced below the prevailing market price, providing them with a favorable investment opportunity while supporting the company’s financial health.
Upon the successful completion of the rights issue, Patel Integrated Logistics anticipates an increase in its equity share base by 7.74 percent, with the total number of shares rising from 6.46 crore to 6.95 crore. This expansion will be instrumental in enhancing the company’s capital structure and reducing its debt burden.
Mahesh Fogla, Executive Director of Patel Integrated Logistics, emphasized the significance of the rights issue in achieving the company’s financial goals. “The funds raised through this rights issue will enable us to repay our term loans, effectively reducing our annual interest burden by approximately Rs one crore. This reduction will positively impact our net profit. By offering the shares at a discount to the current market price, we aim to make the issue appealing to our shareholders and encourage their continued participation in our growth journey. We are optimistic about achieving double-digit growth in FY25,” Fogla stated.
The rights issue is scheduled to open on September 19, 2024, and will close on October 1, 2024. The proceeds from this issue will be utilized primarily to settle term loans, thereby alleviating financial pressures and positioning the company for sustained success.
Patel Integrated Logistics remains committed to its vision of growth and operational excellence, and this rights issue represents a pivotal step in strengthening its financial foundation and driving future progress.
