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Right Issue

Event Date: N/A

Document Summary

The document is an abridged letter of offer from The Ramaraju Surgical Cotton Mills Limited, concerning a rights issue of equity shares.

Introduction & Background:

  • The Ramaraju Surgical Cotton Mills Limited, established in 1939, is part of the Ramco Group. It is engaged in manufacturing yarn, greige fabrics, home textiles, bed linen, and surgical dressings. It also generates electricity from wind and solar power for captive consumption.
  • The company is offering a rights issue to its existing equity shareholders.

Issue Details:

  • Issue Size: Up to 18,17,227 fully paid-up equity shares.
  • Face Value: ₹10 per share.
  • Issue Price: ₹204 per share (including a share premium of ₹194 per share).
  • Total Issue Amount: Up to ₹3,707.14 lakhs.
  • Rights Ratio: 5 Rights Equity Shares for every 11 Fully Paid Up Equity Shares held on the record date (March 5, 2024).
  • Listing: The existing Equity Shares are listed on MSEI. The company has received in-principle approval for listing the Rights Equity Shares on MSEI, which is the designated stock exchange for the issue.
  • Issue Opens: March 15, 2024
  • Issue Closes: March 22, 2024

Objective of the Issue:

  • The primary objectives are to repay or prepay certain outstanding borrowings (including interest) and for general corporate purposes (not exceeding 25% of the gross proceeds).
  • A breakdown of the estimated utilization of net proceeds (₹3,649.04 lakhs) indicates that ₹3,500.00 lakhs will be used for repayment of borrowings, and ₹149.04 lakhs will be allocated for general corporate purposes.

Eligibility and Procedure:

  • The issue is offered to eligible equity shareholders.
  • The Abridged Letter of Offer is available on the websites of the Registrar (www.cameoindia.com), the Company (www.ramarajusurgical.com), SEBI, MSEI and the Lead Manager.
  • Application is mandatorily through the ASBA (Applications Supported by Blocked Amount) process.

Important Dates:

  • Last Date for credit of Rights Entitlements: On or before March 14, 2024.
  • Issue Opening Date: March 15, 2024.
  • Last Date for On Market Renunciation: March 18, 2024.
  • Issue Closing Date: March 22, 2024.
  • Finalization of Basis of Allotment: On or about April 2, 2024.
  • Date of Allotment: On or about April 3, 2024.
  • Date of credit Allottee: On or about April 10, 2024.
  • Date of listing: On or about April 16, 2024.

Shareholding Pattern:

  • As of December 31, 2023, the shareholding pattern shows Nalina Ramalakshmi as the largest shareholder with 38.79% of holdings. Other significant shareholders include NRK.Ramkumar Raja (5.33%), and NRK Ramkumar Raja HUF (1.15%).

Board of Directors:

  • The document lists the names, designations, and other directorships of the company's board members. Key figures include P R Venketrama Raja (Chairman), Nalina Ramalakshmi (Managing Director), and N. R. K. Ramkumar Raja (Managing Director).

Financial Summary (Consolidated):

  • Total income from operations for the nine months ended December 31, 2023, was ₹26,474.64 lakhs.
  • Net loss before tax and extraordinary items for the same period was ₹(4,040.75) lakhs.
  • Net Worth as of December 31, 2023, is not available, while for F.Y. 2022-23 it was ₹15,746.85 lakhs.
  • Basic and diluted earnings per share were ₹(78.70) for the nine months ended December 31, 2023.
  • Return on Net Worth (%) for the nine months ended December 31, 2023, was (25.07%).

Risk Factors:

  • Key internal risk factors include the impact of raw material price fluctuations (particularly cotton) and the absence of long-term contracts with customers.
  • The company is exposed to foreign exchange fluctuation risks.
  • The company has incurred losses in the recent past.
  • Any decrease in demand for products may adversely affect the business.

Litigation and Defaults:

  • There are no significant outstanding litigations or defaults involving the company.

Terms of the Issue - Application Process

  • Applications must be mandatorily submitted through the ASBA process, carefully adhering to the guidelines.
  • Investors can accept the Issue and apply for the Rights Equity Shares by submitting the Application Form to the Designated Branch of the SCSB or online/electronic Application through the website of the SCSBs (if made available by such SCSB) for authorizing such SCSB to block Application Money payable on the Application in their respective ASBA Accounts.

Restrictions:

  • The Rights Entitlements and Rights Equity Shares have not been and will not be registered under the United States Securities Act, 1933, as amended, or any U.S. state securities laws and may not be offered, sold, resold or otherwise transferred within the United States of America or the territories or possessions thereof

Promoter Intention:

  • The Promoter has confirmed their intention to subscribe to the full extent of their Rights Entitlements and not renounce them (except in favor of Promoter or Promoter Group members).

This summary aims to provide a detailed overview of the key aspects of the rights issue as described in the abridged letter of offer.

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