The Business Bytes
Ahmedabad, May 28, 2024 (TBB Bureau): Franklin Industries Ltd, a leading player in the trading of agricultural commodities and contract farming services based in Gujarat, has announced the opening of its Rs. 38.83 crore Rights issue on May 24, 2024.
The funds garnered through this issue, aimed at bolstering the company’s expansion endeavours, will primarily be allocated towards fulfilling working capital requirements and facilitating general corporate objectives. Priced at Rs. 3.58 per share, a stark contrast to the closing share price of Rs. 7.50 on May 24, the Rights Issue is slated to close on June 11, 2024.
The offering comprises 10,84,50,000 fully paid-up Equity Shares, priced at Rs. 3.58 per share (including a premium of Rs. 2.58 per share), aggregating to Rs. 38.83 crore. Shareholders can avail a Rights entitlement ratio of 3:1, translating to 3 Rights equity shares for every 1 fully-paid equity share held as of the record date – May 13, 2024. The deadline for On-market Renunciation of Rights Entitlements is set for June 5, 2024.
Of the total proceeds, Rs. 29.26 crore will be channelled towards augmenting working capital, while Rs. 9.31 crore will be earmarked for general corporate purposes.
Established in 1983, Franklin Industries Ltd has carved a niche in trading agricultural commodities such as wheat, rice, maize, and various fruits and vegetables. Recently, the company unveiled plans to diversify its operations into contract farming, reflecting its commitment to innovation and sustainable agricultural practices.
Under its contract farming initiative, the company leases agricultural land to cultivate crops like cucumbers, onions, and castor, sharing a portion of the yield with local farmers. This collaborative approach not only supports the farming community but also ensures a steady supply of quality produce.
Financially, Franklin Industries Ltd has witnessed remarkable growth, with total income for FY23-24 surging to Rs. 50.95 crore, marking a staggering 148% increase from the previous fiscal year. Net Profit for the same period soared to Rs. 10.46 crore, a substantial leap from Rs. 21.43 lakh reported in the corresponding period last year.
Furthermore, the company underwent a stock split in January 2024, reducing the face value from Rs. 10 per share to Rs. 1 per share.
Assuming full subscription, the post-issue outstanding equity shares will escalate to 14.46 crore from the existing 3.61 crore shares, reflecting the company’s ambitious growth trajectory.
