Shivam Autotech Announces Rs 120 Crore Rights Issue

Issue size: Up to Rs 12,000 lakh (Rs 120 crore). Issue price: Rs 12 per share.

Reader Takeaway: Capital infusion targets debt reduction, yet significant financial stress and negative net worth remain persistent risks.

What just happened

Shivam Autotech Limited has formally announced a rights issue of up to 10,00,00,000 fully paid-up equity shares. The shares are priced at Rs 12 each, which includes a premium of Rs 10 per share. Existing shareholders as of the record date of October 15, 2026, are eligible to participate in the ratio of 19:25.

Why this matters

The company aims to raise approximately Rs 120 crore to address its liquidity and debt profile. A substantial portion of the proceeds—roughly Rs 7,500 lakh—is designated for the repayment of unsecured loans taken from the promoter, Dayanand Munjal Investments Private Limited. Additionally, Rs 3,200 lakh will be allocated toward working capital requirements to support ongoing operations, with the remainder for general corporate purposes.

Risks to watch

Investors must weigh the capital injection against the firm's significant financial hurdles. As of June 30, 2026, the company reported a net loss of over Rs 20 crore and a negative net worth of Rs 6,167.13 lakh. Furthermore, statutory auditors have raised concerns regarding accumulated losses. Notably, the company has been classified as a 'Red' vendor by a key customer, potentially threatening future order volumes and business sustainability.

What to track next

The issue opens on October 22, 2026, and closes on November 19, 2026. Market participants should monitor the subscription levels and the company's subsequent ability to improve its liquidity position. The promoter's commitment to subscribe to their entitlement is a key signal of confidence in the company's turnaround plan, though operational improvements remain the primary long-term metric for value.