Apollo Pipes board approves ₹300 crore entry into tiles and ceramics, ₹189 crore warrant issue

Apollo Pipes diversifies into tiles and ceramics

Apollo Pipes Ltd is expanding beyond its core piping products, with its board approving an investment of up to ₹300 crore to enter the tiles and ceramics marketas reported by CNBC TV18 and The Financial Express. The company plans to set up a subsidiary that will manufacture, trade, market and distribute tiles, ceramics and allied products, according to both outlets.

The subsidiary may acquire existing operational and profitable manufacturing businesses, as reported by The Financial Express, indicating the company could grow through acquisitions rather than building entirely new operations. CNBC TV18 also noted this possibility.

The board has authorised Managing Director Sameer Gupta and Joint Managing Director Arun Agarwal to incorporate the subsidiary and determine the timing and manner of investment, according to CNBC TV18. The Financial Express similarly reported that these two executives will handle responsibilities pertaining to the subsidiary, including how it is phased out and the timing of the investment.

₹189 crore preferential issue

Separately, Apollo Pipes' board has approved a preferential issue of up to 31 lakh warrants to identified non-promoter investors, as reported by both CNBC TV18 and The Financial Express. The warrants, each of face value ₹10, will be issued at ₹610 apiece, including a premium of ₹600 per warrant, amounting to approximately ₹189 crore, according to The Financial Express. CNBC TV18 confirmed the issue at ₹610 per warrant with the same premium, though it did not specify the total amount raised.

The issue will be made on a preferential basis to the 'Non-Promoter' category for a cash consideration, with each warrant fully convertible into one equity share, as reported by The Financial Express. The eight investors named by The Financial Express are: AGDG Enterprises LLP, Rachita Gupta, Gaurav Arora, Rohit D Gupta, Anshvardhan Modi, Poonam Krishan Patel, Ekta Tayal, and Sukumar Srinivas. CNBC TV18 did not list the investors.

The issuance is subject to the approval of shareholders of the company and other requisite statutory and regulatory approvals, according to both outlets. The Financial Express also noted that post-preferential issue, the eight investors' total stakeholding would stand at 6.31%.

Share capital increase and stock movement

The company's senior management has approved increasing the authorised share capital to ₹60 crore from ₹50 crore, by dividing 6 crore equity shares of ₹10 each, as reported by both sources. This move, according toeach, is intended to ensure adequate authorised capital is available for allotment of shares upon conversion of warrants.

In recent trading, Apollo Pipes' stock has seen significant gains. The Financial Express reported that over the past one month, its share price has increased by more than 20%, and over the past six months, its stock has delivered a return of 80%. CNBC TV18 did not provide such market performance data. Neither outlet provided a current share price at the time of reporting.