Penny Stock Below Rs 5 Okays Conversion of 135 Million Warrants Into Shares

GG Engineering Ltd a small-cap company in the capital goods sector has approved the allotment of 135 million warrants into equity shares on a preferential basis, upon receipt of a balance amount aggregating to Rs. 13,36,50,000.

"We wish to inform you that the Board of Directors of the Company in their meeting held today i.e. Friday, May 03, 2024, inter-alia, considered and approved the allotment of equity shares on conversion of 13,50,00,000 warrants into 13,50,00,000 equity shares at an issue price of Rs. 1.32/- each (including a premium of Rs. 0.32/- each), to "Non-Promoters/Public Category", on preferential basis, upon receipt of balance amount aggregating to Rs. 13,36,50,000/- (Rupees Thirteen Crores and Thirty-Six Lakhs Fifty Thousand Only) at the rate of Rs. 0.99 (Ninety Nine Paise only) per warrant (being 75% of the issue price per warrant) from the allottees," said GG Engineering in a regulatory filing.

Preferentially, the "Promoters and Promoter Group" and the "Non-Promoters/Public Category" will receive warrants at an Issue Price of Rs. 1.32/-. Upon payment of Rs. 0.33 paisa per warrant, which represents 25% of the issue price, the holders of the warrants will be entitled to have their warrants converted into an equal number of equity shares of the company by paying the remaining 75%, or Rs. 0.99/-, within 18 months of the warrants being issued, according to the Board of Directors of the company.

As a result of the warrant discussion and equity share allocation, the company's issued and paid-up capital has grown to Rs 153,44,98,800, which is made up of 153,44,98,800 equity shares valued at Re 1 apiece. The newly allocated equity shares shall rank pari-passu with the company's current equity shares.

"It may be please note that 13,50,00,000 total warrants are outstanding for conversion and these warrant holders are entitled to get their warrants converted into equal number of Equity Shares of the Company by paying remaining 75% i.e., Rs. 0.99/- per warrant within 18 months from the date of warrant allotment," the company further informed the stock exchanges.

In terms of financials, G G Engineering's net profit jumped by 1.86% to Rs 5.47 crore in Q4FY24 from Rs 5.37 crore in Q4FY23. Sales went up from Rs 24.93 crore in Q4FY23 to Rs 76.42 crore in Q4FY24, a 206.54% growth. Net profit for the entire year dropped by 10.47% to Rs 7.10 crore in FY2024 from Rs 7.93 crore in FY2023. Sales surged to Rs 212.11 crore in FY2024 from Rs 99.57 crore in FY2023, a 113.03% growth. EBITDA soared by 56.98% to Rs. 8.32 crore in Q4FY24 from Rs. 5.30 crore in the same quarter of FY23.

On Friday the shares of GG Engineering ended at Rs 2.22 apiece on BSE. The scrip touched a 52-week-high of Rs 2.97 on (31/01/2024) and a 52-week-low of Rs 0.87 on (26/05/2023).