Gokul Agro Resources has announced a Rs. 41.13 crore rights issue. The issue was approved in a meeting on 20th February, 2023. It will remain open from 16th March to 23rd March, 2023.
Gokul Agro Resources Limited is a leading FMCG company in India that has global operations. It has a subsidiary company in Singapore for its global operations.
Within India, Gokul Agro Resources Limited operates in over 20 states and has a robust marketing and distribution network. Its product assortment largely includes castor oil of various grades and its derivatives.
Overall, its product line consists of:
The company has a modern manufacturing facility with the latest equipment and technology at Gandhidham, Gujarat, India.
Its strengths include a strong network of raw material supply that allows it to thrive in an agricultural products business.
It is a small cap company with a market capitalisation of Rs 1,639 crore.
The objectives of the rights issue, however, are unclear at the moment.
Unlike initial or follow-on public offerings, rights issues are not open for general shareholders but are available only to the existing shareholders.
To participate in the rights issue, the shareholder must be owning the company’s share on the record date. You can’t apply for the rights shares if you are not a shareholder of the company issuing the rights on the record date.
Terms of payment
The full amount of Rs. 92/- per share must be paid on application by the eligible shareholder.
| Last Date to buy shares | 6th March 2023 |
| Record Date | 8th March 2023 |
| Issue Open | 16th – 23rd March 2023 |
| Security Name | Gokul Agro Resources Ltd |
| Issue Size (No. of shares) | 4,47,1011 |
| Issue Size (Amount) | Rs. 41.13 crore |
| Issue Price | Rs. 90 per share |
| Face Value | Rs. 2 per share |
| Listing at | NSE, BSE |
| Terms of Payment | Full amount of Rs. 92 to be paid on application |
| Entitlement | 1 Rights Share for every 32 fully paid-up Equity Shares held on Record Date |
| Credit of Rights Entitlements | 13th March 2023 |
| Renunciation of Rights Entitlements | 17th March 2023 |
| Deemed Date of Allotment | 31st March 2023 |
| Credit Date | 6th April 2023 |
| Listing Date | 11th April 2023 |
There are multiple ways for a shareholder to apply for a rights issue –
However, RTAs can also allow you to apply online. You’ll need to provide the following details.
When you decide whether to participate in a rights issue or not, remember that if you ignore the offer, your shareholding will get diluted due to the extra shares issued by the company.
In the last 3 years, Gokul Agro Resources Ltd(GARL) has proved to be a multibagger, going from Rs. 7 to Rs. 111. Recently, it saw a rise in its share price by more than 80% in the period of 17th-24th Oct 2022. Since then its share price has corrected and has been slowly dropping.
The rights issue is an offer to existing shareholders to buy additional shares. Cash-strapped companies sometimes release rights shares when they need to raise additional funding. The offer gives the right to the shareholders but not the obligation to buy new shares of the company at a discounted price.
The rights offer gives shareholders securities called rights. With the rights, the shareholders can buy new shares at a lower rate than the current market price on a fixed future date. Individuals can choose to increase their ownership of the company by participating in the rights issues.
One of the important numbers to know regarding the rights issue is the rights issue ratio. Rights issues are generally shared on a pro-rata basis at a pre-determined and declared rate. Gokul Agro Resources rights issues will be available at a ratio of 1:32. For 32 shares held already on the record date, shareholders will receive 1 rights share at Rs. 92 per share (including share capital of Rs. 2 and share premium of Rs. 90).
As on 13th March 2023, Gokul Agro share price at NSE stock exchange was Rs. 112.20, meaning the rights issues will be available at a discounted price. The stock price has slightly fallen though, since the announcement of the rights issue.
Following Angel One’s website for more such market updates. You can start buying shares by opening a free Demat account on Angel One’s mobile app.
Disclaimer: This blog is exclusively for educational purposes. The securities quoted are examples and not recommendations.
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