Shah Foods Acquires Power Tech Firm, Eyes Diversification Via Share Swap

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AuthorRiya Kapoor|Published at:
Shah Foods Acquires Power Tech Firm, Eyes Diversification Via Share Swap
Overview

Shah Foods Limited is set to acquire Tandhan Power Technologies for ₹99.28 Cr through an equity share swap, significantly diversifying its business into power storage. The company also approved a ₹75.16 Cr preferential cash issuance, increased authorized share capital to ₹24 Cr, and raised borrowing limits to ₹500 Cr. The registered office is planned to shift from Gujarat to West Bengal, pending approvals.

Shah Foods Limited Embarks on Major Diversification with Tandhan Power Acquisition

Strategic ₹99 Cr Share Swap and ₹75 Cr Preferential Issue Signal New Business Horizon.

Shah Foods Limited announced a pivotal strategic move to acquire 100% of Tandhan Power Technologies Private Limited for ₹99.28 Cr via a share purchase and subscription agreement. This acquisition marks a significant diversification into the power storage and backup solutions sector. The consideration will be discharged by issuing up to 1.58 crore equity shares of Shah Foods at ₹62.50 per share, representing a cashless swap for Tandhan Power's shareholders. Tandhan Power's reported turnover of approximately ₹144.35 Cr for FY25 provides an initial scale for this new vertical.

Complementing the acquisition, Shah Foods approved two preferential share issuances. The first, a cashless swap valued at ₹99.28 Cr, aligns with the acquisition's share issuance. The second involves issuing shares for cash consideration to the non-promoter public category, raising ₹75.16 Cr at ₹110 per share. These issuances, alongside a substantial increase in authorized share capital from ₹1 Cr to ₹24 Cr and proposed enhancement of borrowing and investment limits to ₹500 Cr, underscore the ambitious financial restructuring accompanying this diversification.

The approved shift of the registered office from Gujarat to West Bengal, pending regulatory approvals, indicates a broader geographical repositioning. The appointment of Mr. Vinodkumar Shrikrishna Garg as Additional Non-Executive, Non-Independent Director suggests governance adjustments aligned with the new strategic direction.

Investors will closely monitor the integration of Tandhan Power and its operational performance within the Shah Foods umbrella. The significant equity dilution through share issuances and the increased leverage potential necessitate careful financial management to ensure value creation. The success of the registered office shift and regulatory approvals for the capital and borrowing enhancements will also be key watch points. The market will assess how effectively Shah Foods leverages this new vertical to drive future growth and profitability.

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