String Metaverse Seeks Shareholder Vote on Bonus Issue to Meet SEBI Rules

String Metaverse is conducting a postal ballot for shareholders to approve a bonus share issue. The voting period runs electronically from May 6 to June 4, 2026. This move is critical for the company's regulatory standing.

Why This is Necessary

SEBI requires listed companies to maintain a minimum public shareholding of 25%. String Metaverse's current public shareholding is 21.48%, falling short of this mandate. Failure to comply can result in penalties or delisting from stock exchanges. The proposed bonus issue, exclusively for public shareholders, aims to bridge this gap and ensure continued listing.

Past Attempts and Company Context

This is not the first attempt to resolve the public shareholding deficit. In April 2026, an Offer for Sale (OFS) by promoters increased public stake to 21.48%, but it remained below the 25% SEBI requirement. The company had previously considered a Rights Issue for compliance but withdrew it in favor of the current bonus share strategy. String Metaverse has also undergone a transformation from paper manufacturing to a technology enterprise and faced regulatory scrutiny in March 2026 regarding insider trading violations.

Implications if Approved

Shareholder approval is the key trigger for the bonus issue. If approved, the company plans to issue 2 bonus shares for every 9 existing shares held by public shareholders. This action is designed to bring the company into compliance with SEBI's Minimum Public Shareholding (MPS) regulations and significantly mitigate the risk of penalties or delisting.

Potential Hurdles Ahead

A primary risk is shareholder rejection of the bonus issue proposal during the postal ballot. The company could also face unforeseen regulatory hurdles or changes in SEBI guidelines. There's also a possibility that other compliance issues might arise even after this bonus issue is completed.

Industry Context

String Metaverse operates in the technology and digital infrastructure sector. Companies like Tata Technologies and Netweb Technologies are often cited for comparison due to their involvement in software and IT services. However, specific peers undertaking similar compliance-driven bonus issues for MPS norms are not readily identified.

Shareholding Snapshot

As of March 2026, promoter shareholding was 81.79%, with public shareholding at 18.21%. The April 2026 OFS increased public shareholding to 21.48%.

Looking Ahead

Investors should monitor the outcome of the postal ballot and shareholder voting results, expected by June 4, 2026. Key follow-ups include the announcement of the record date for bonus share allotment if approved, tracking the company's updated public shareholding percentage post-allotment, and observing any further regulatory updates from SEBI or the exchange.