Heritage Foods Surges As The Board Issue Equity In ratio 1:1 Via Rights Issue

Heritage Foods Ltd is a small-cap company with over Rs. 1 605 Crores market capitalization. The Company is primarily engaged in the business of processing and procurement of Milk products & milk. It is also responsible for generating power through wind & solar for the captive solar plant's consumption for the dairy plants.

The stock price has been surging to the upside in the past few weeks after a sharp downfall; however, in today's trading session, the stock has seen a huge hike in volume, and it has gained more than 10%. The stock is trending in the news because the Company's officials recently announced an issue of equity shares in the ratio of 1:1 via the rights issue for the existing shareholders.

The officials approved the rights issue decision at the Board meeting held on September 30, 2022. The issuance of the equity shares via the right Issue means the shareholders will get an extra share in this case; if a shareholder is holding 100 shares, then they will get more than 100 shares but at a lesser value than the current market price.

In the most recent announcement on a rights issue to the Bombay stock exchange, the Company mentioned, "To Issue equity shares in the ratio of 1:1 by way of Rights Issue basis at face value of Rs.5/- each per equity shares to the existing shareholders of the Company as on the record date (to be notified later).

Further, the Board has constituted and authorized the 'Rights Issue Committee' to decide detailed terms and conditions of the Issue, including but not limited to deciding the payment modalities/schedule thereof, record date, timings, other terms and conditions and all other related matters etc.

The promoter and promoter group of the Company may subscribe to all the unsubscribed shares in the Issue, if any."