Avalon Technologies’ Board of Directors has approved a preferential issuance of up to 19,37,808 warrants to Zollner Elektronik AG. Each warrant is convertible into one equity share at a price of ₹2,193.20, aggregating up to ₹425,00,00,505.60. This move requires shareholder approval via a special resolution and aims to raise substantial capital, with a potential dilution of 2.82% post-conversion. The company is also altering its Articles of Association to facilitate such issuances.
Avalon Technologies Approves Major Capital Infusion
In a significant strategic move, the Board of Directors at Avalon Technologies Limited has given its in-principle approval for a substantial preferential issuance of warrants. This decision, made during a board meeting on October 27, 2026, is aimed at bolstering the company’s capital structure and facilitating future growth.
Preferential Issuance Details
The company plans to issue up to 19,37,808 warrants on a private placement basis to Zollner Elektronik AG. Each warrant carries the right to subscribe to one fully paid-up equity share of the company, with a face value of ₹2 per share. The issue price for each warrant has been fixed at ₹2,193.20, leading to an aggregate issue size of approximately ₹425,00,00,505.60 (Rupees Four Hundred and Twenty Five Crore, Five Hundred and Five and Sixty Paise).
The conversion of these warrants into equity shares is expected to result in a post-preferential issue shareholding of 2.82% for the subscriber. This issuance is contingent upon obtaining the necessary approval from the company’s shareholders through a special resolution, as well as other regulatory and statutory clearances.
Alteration of Articles of Association
To accommodate this preferential issue and similar future capital-raising activities, Avalon Technologies will also seek shareholder approval to alter its Articles of Association. Key amendments include inserting a definition for “securities” and modifying existing articles to expressly permit the issuance of warrants and other convertible or exchangeable securities.
Extra-ordinary General Meeting Announced
To secure the required shareholder approvals for the preferential issuance and the amendments to the Articles of Association, the company has announced an Extra-ordinary General Meeting (EGM). The EGM is scheduled to be held on Saturday, November 21, 2026, at 11:00 AM, via Video Conferencing and other Audio-Visual Means.
Appointment of Monitoring Agency
In compliance with regulatory requirements, Avalon Technologies has also appointed Crisil Ratings Limited, a SEBI-registered credit rating agency, as the Monitoring Agency. This agency will oversee the utilization of the proceeds from the preferential issue, as mandated by Regulation 162A of Chapter V of the SEBI ICDR Regulations.
Warrant Conversion Terms
The warrants are exercisable within a period of 18 months from the date of allotment. A payment of 25% of the total consideration is due at the time of subscription and allotment, with the remaining 75% payable upon the exercise of the right to subscribe to equity shares. If the entitlement is not exercised within the 18-month period, the rights attached to the warrants will expire, and any amounts paid will be forfeited by the company.
Source: BSE
