Shraddha Prime Projects Approves ₹97 Crore Rights Issue to Fuel Growth

Shraddha Prime Projects plans to raise ₹9,700 lakh (₹97 crore) through a rights issue of equity shares. This capital raise comes as the company reported a significant jump in its consolidated net profit for FY25, reaching ₹2,491.54 lakh, up from ₹656.48 lakh in FY24.

On March 20, 2026, the company announced its Board of Directors has approved a proposal to raise capital via this rights issue. The company aims to secure up to ₹9,700 lakh (₹97 crore) by issuing equity shares. A dedicated Rights Issue Committee has been formed to finalize the specific terms, but the plan requires in-principle approval from stock exchanges and other relevant regulatory bodies.

This rights issue is a strategic move to inject fresh capital into operations, likely for funding real estate development projects. For a developer like Shraddha Prime, capital is essential for acquiring land, construction, and managing daily operations, given the sector's capital-intensive nature. The issue also provides existing shareholders a chance to increase their stake, possibly at a favorable price.

Mumbai-based Shraddha Prime Projects develops residential projects, townships, and undertakes slum rehabilitation. The company has a track record of raising funds through capital markets, including a ₹49.88 crore rights issue in 2023 and an approved ₹49.87 crore rights issue in March 2023. In late 2025, it also proposed raising up to ₹60 crore via Non-Convertible Debentures (NCDs).

Financially, the company has improved significantly. Its consolidated total income for FY25 grew to ₹16,016.56 lakh from ₹8,480.38 lakh in FY24, with net profit surging to ₹2,491.54 lakh from ₹656.48 lakh. Standalone net profit also rose sharply to ₹2,464.28 lakh in FY25 from ₹653.36 lakh in FY24. However, working capital days have significantly increased from 305 to 587 days, suggesting potential pressure on its cash conversion cycle. In a separate development in March 2026, promoter Sudhir Balu Mehta pledged about 17.33% of his stake to HDFC Bank as collateral for an LLP loan.

This rights issue offers existing shareholders the opportunity to buy new shares, potentially at a preferential price, and increase their ownership. The raised capital will strengthen the company's balance sheet, supporting expansion, project execution, or debt reduction. However, failure to fully subscribe could dilute shareholders' stakes. The stock exchange and regulatory approval process may also bring increased market scrutiny.

Key risks include obtaining necessary in-principle approval from stock exchanges and regulators, introducing uncertainty. The success of the rights issue will also depend on prevailing market conditions and investor demand.

Operating in India's competitive real estate sector, Shraddha Prime Projects' market capitalization of around ₹660-670 crore (March 2026) makes it a smaller player compared to giants like DLF Ltd. (approx. ₹1.35 lakh crore market cap) and Lodha Developers Ltd. (approx. ₹84,000 crore market cap). While larger peers often have diverse funding options, Shraddha Prime's rights issue strategy suggests a focus on organic growth and building its capital base with existing shareholders.

Investors will be watching for:

• Confirmation of in-principle approval from the stock exchange and regulators.
• The Rights Issue Committee's announcement of specific terms, including issue price, ratio, and record date.
• The company's detailed plans for using the raised funds.
• Market reaction to the rights issue and its terms.