Pantaloon Retail has informed BSE that members at an Extra Ordinary General Meeting (EGM) of the Company held on 12 May, 2009, inter alia, have passed Special resolution to create, offer, issue and allot from time to time in one or more tranches 11 million equity shares to PFH Entertainment Ltd, a company within the promoter group and 4.1 million equity shares to Dharmayug Investment Ltd.
Each equity share with face value of Rs2 will be allotted at a premium of Rs181 per equity share aggregating to an issue price of Rs183.
The Board also passed the resolution to offer, issue and allot from time to time in one or more tranches, 5 million warrants to the PFH entertainment Ltd, each convertible into one equity share of Rs2 at the premium of Rs181 aggregating to an issue price of Rs183.
The option to acquire equity shares may be exercised by the warrant holder(s) any time in the 18 months after the allotment.
The applicant(s) will have to pay 25% of the price of the warrants to the company as a deposit to be adjusted against the price of the equity share payable at the time of exercising the option.
With this, the total money flowing into the company would be Rs368 crore, of which about Rs300 crore is expected before the end of FY2009 (June-ending) from allotment of shares and warrant application money.
We have already factored the preferential allotment of 15.1 million equity shares and 5 million warrants in our estimates.
At CMP of Rs211, the stock is currently trading at 18.2x FY2010 EPS and 2.9x FY2010 P/BV.
On account of recent run-up in the stock, we revise our rating to ACCUMULATE with a target price of Rs239.