Allcargo Terminals approves ₹80-crore rights issue, check stock reaction

Allcargo Terminals has received board's approval to raise ₹80 crore through a rights issue, offering shares of ₹2 face value to eligible shareholders. The terms and timeline for this rights issue are yet to be disclosed. Rights issues typically allow existing shareholders to purchase additional shares, often at prices below the prevailing market rate, enhancing their stake and giving the company access to additional capital. Only shareholders registered as of the yet-to-be-announced record date will qualify to participate, with ineligible holders unable to subscribe.

The announcement accompanied a decline in the company’s shares, which were trading 0.9% lower at ₹36.8 on Tuesday. This marks the second consecutive day of fall, with the stock falling in five out of the last seven trading sessions. On a year-to-date basis, Allcargo Terminals stock remains down by 3%.

The exact terms, including the rights issue price and record date, have not been made public, leaving market participants awaiting further clarity from the company. The latest fund-raising initiative may impact the company’s capital structure and liquidity position for the remainder of the financial year.

Rights issues are a common method for companies to shore up reserves, particularly when seeking to fund expansion or strengthen the balance sheet. Shareholders and analysts will closely monitor subsequent disclosures for details on pricing and allocation, which could influence trading volumes and investor sentiment in the coming weeks.