Lloyds Engineering Announces ₹987 Crore Rights Issue, April 28 Record Date

Lloyds Engineering Works Limited (formerly Lloyds Steels Industries Limited) has announced Monday, April 28, 2025, as the record date for its rights issue. The announcement prompted only a modest market response: the share price rose from ₹62.48 to ₹62.80 before retreating, and it is currently trading at ₹61.55. 

Rights Issue Size and Objective

The Rights Issue will consist of 30.85 crore partly paid-up equity shares with the objective of aggregating up to ₹987.26 crore.  The net proceeds from this offer are proposed to be applied towards the following key initiatives:

• Industrial Shed Replacement & Restoration (₹39.06 crore): Capital expenditure for replacement of wall and roof sheeting, repair, restoration, and structural strengthening of the existing workshops at Murbad, Thane.
• Acquisition & Overhaul of Engineering Assets (₹134 crore): Funding the acquisition of the engineering assets of Bhilai Engineering Corporation and the subsequent overhauling and refurbishment of the related machinery.
• Working Capital Requirements (₹336.53 crore): Bolstering the company’s day‑to‑day operational liquidity to support growth and operational efficiency.
• Equity Investment in Techno Industries (₹25 crore): Second‑tranche investment in the equity shares of Techno Industries to strengthen strategic partnerships and expand capabilities.
• Unidentified Acquisitions & General Corporate Purposes: Providing flexibility to pursue future acquisitions as opportunities arise, as well as supporting broader corporate objectives.

Issue Price and Payment Schedule

Rights Issue Price is at ₹32 per Equity Share fully paid up, comprising a premium of ₹31 per Rights Equity Share. The payment terms for each Rights Equity Share are as under:

• On Application: ₹0.50 (Face Value) + ₹15.50 (Premium) = ₹16.00 (representing 50% of the Issue Price)
• On Calls (up to two): ₹0.50 (Face Value) + ₹15.50 (Premium) = ₹16.00 (comprising 50% of the Issue Price), on terms and schedule to be determined by the Board or Securities Issue Committee, to be completed on or prior to March 31, 2026.

Record Date and Eligibility

It is made clear in the announcement that the Record Date, April 28, 2025, will ascertain equity shareholders eligible to receive the rights entitlement in this issue.

Subscription Period and Rights Entitlement

The Rights Issue Period will start on Thursday, May 15, 2025, and end on Friday, May 30, 2025.

Moreover, the Rights Entitlement Ratio is fixed at 9 Rights Equity Shares for each 34 fully paid-up equity shares held by the eligible shareholders as of Record Date

Outstanding Share Capital (Pre‑ and Post‑Issue)

Outstanding Equity Shares of the company are:

• Before the Rights Issue: 116.55 crore shares
• After Rights Issue: 147.40 crore shares (on the basis of assumed full subscription and payment of call monies).

Other Conditions & Market Response

Details of other conditions of the Rights Issue - including fractional and zero entitlements - will be set out in the Letter of Offer to be filed with SEBI and the stock exchanges. The announcement prompted only a muted market reaction with the share price only up by 0.80% as the counter closed at a price of Rs. 61.50 per share.

Disclaimer: This news is solely for educational purposes. The securities/investments quoted here are not recommendatory.

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