Shraddha Prime Projects Plans ₹97 Crore Rights Issue

Shraddha Prime Projects Ltd plans to raise up to ₹97 crore through a rights issue of equity shares.

What Happened Today

The board of directors at Shraddha Prime Projects Ltd has approved a proposal to raise capital via a rights issue. This aims to bring in up to ₹97 crore by issuing new equity shares. A committee will be formed to determine the specific terms, such as the issue price and ratio. The proposal requires in-principle approval from stock exchanges and relevant regulatory bodies.

Why This Matters

This capital raise is important for Shraddha Prime Projects Ltd's growth strategy, likely funding ongoing or new real estate developments. It shows the company's intent to expand its asset base and project pipeline. However, rights issues can lead to equity dilution if existing shareholders do not participate, potentially impacting their ownership percentage.

Company Background

Shraddha Prime Projects Ltd, previously Towa Sokki Limited, is a Mumbai-based real estate developer focused on residential projects, including townships and slum rehabilitation. The company has a history of capital raising. In July 2023, it completed a rights issue that raised approximately ₹49.88 crore. Before that, in March 2023, the board had approved a draft rights issue proposal for a similar amount. In November 2025, the company also approved raising up to ₹60 crore via Non-Convertible Debentures (NCDs).

What This Means for Shareholders

Existing shareholders will have the opportunity to subscribe to new equity shares, potentially at a discount. The company gains access to fresh capital for project development, land acquisition, or debt reduction. Shareholders who do not participate may see their ownership percentage diluted. A new committee will be established to finalize the rights issue details.

Key Risks to Consider

• Equity Dilution: Non-participating shareholders will see their stake reduced.
• High Debt Levels: The company carries a significant debt-to-equity ratio of 223.5%, which has been increasing.
• Working Capital Management: Working capital days have substantially increased from 305 to 587 days.
• Promoter Pledge: Promoter Sudhir Balu Mehta has pledged a significant portion of his stake (70 lakh shares) to HDFC Bank for a loan, which may concern investors.
• Past Compliance Issues: The company faced a penalty for non-compliance related to Minimum Public Shareholding (MPS) regulations during a promoter reclassification process.

Industry Peers

Shraddha Prime Projects Ltd operates in the competitive Indian real estate sector alongside established players like DLF Ltd., Lodha Developers Ltd., Godrej Properties Ltd., and Oberoi Realty Ltd. These peers are typically involved in large-scale residential and commercial developments across multiple cities, often with significant market capitalization.

Key Financial Data

For the financial year ended March 31, 2025, Shraddha Prime Projects Ltd reported consolidated total income of ₹160.17 crore and a consolidated profit after tax of ₹24.92 crore.

What to Track Next

• Receipt of in-principle approval from BSE and other regulatory bodies.
• Finalization of the rights issue terms, including the price per share and the ratio, by the newly formed committee.
• The market's reaction to the rights issue announcement and its terms.
• The company's detailed plan for using the raised funds.
• Any further developments regarding promoter shareholding or debt management.