Shares of Max India rose as much as 11% to hit a day high of Rs 186, after the company raised Rs 80.35 crore through a preferential issue.

The move came after Max India’s board, through a resolution passed on 23 July, approved the allotment of 36.2 lakh equity shares.

These shares came from the conversion of fully convertible warrants, a kind of instrument that lets an investor convert their holding into regular equity shares later.

The issue price was set at Rs 222 a share, which includes a face value of Rs 10 and a premium of Rs 212, and works out to roughly 24% above where the stock was trading before the announcement.

Singularity Equity Fund I, backed by veteran investor Madhu Kela, picked up 22.53 lakh shares and turned out to be the largest non-promoter allottee.

Promoter entity Max Ventures Investment Holdings got 9.91 lakh shares, while the rest went to a mix of individual and corporate investors, including P&Y Capital Trust and Kantilal Babulal Oswal.

With this allotment, Max India’s paid-up equity capital has gone up to Rs 56.2 crore, made up of 5.62 crore shares of Rs 10 face value each. The newly issued shares will carry a lock-in period under SEBI’s ICDR rules, so they cannot be sold immediately.

It is worth noting that Max India has been loss-making for the last eight quarters, and the stock is still down about 26% from its 52 week high of Rs 241.57 hit in September last year, even after this week’s sharp rally.

As of 10:52 am, Max India shares were trading at Rs 179.20 on the NSE, up 8.18% on the day.

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