DEE Development shares fall 4% after board approves ₹300 crore preferential issue

Shares of DEE Development Engineers Ltd. slipped over 4% on Wednesday, June 3, after the company approved a preferential issue of equity shares worth ₹300 crore to promoter and non-promoter entities.

Preferential Issue Contours

In an exchange filing, DEE Development said its board approved the issuance of up to 59.76 lakh equity shares at a price of ₹502 per share, including a premium of ₹492 per share, aggregating to ₹300 crore. The proposal is subject to shareholder and regulatory approvals.

Of the total fundraise, the company will issue 3.98 lakh shares worth about ₹20 crore to promoter group entity Krishan Lalit Bansal, increasing his shareholding to 3.56 crore shares after the allotment. However, his percentage ownership will decline to 47.31% from 50.82% due to equity dilution arising from the larger issue to non-promoter investors.

The Non-Promoter Allottees

The remaining 55.78 lakh shares worth approximately ₹280 crore will be allotted to 23 non-promoter investors, including mutual funds, alternative investment funds, foreign portfolio investors, corporates and public investors.

Among the proposed allottees are entities associated with WhiteOak Capital, ValueQuest, 360 ONE PIPE Fund, Kotak Multi Asset Allocation Fund and several other institutional and investment funds.

The company has scheduled an Extraordinary General Meeting (EGM) on June 27 to seek shareholder approval for the preferential issue. The board has also constituted a fund-raising committee to oversee the process and related activities.

The preferential issue announcement comes a day after the company disclosed fresh order wins worth ₹206.55 crore from a Maharatna public sector EPC conglomerate in the power sector, to be executed over two to 15 months from the issuance of the purchase orders.

Shares of DEE Development Engineers are trading 4.3% lower on Wednesday after the earnings announcement at ₹626. The stock is up 43% so far this month and has gained nearly 200% so far on a year-to-date basis.