The CCD dilutes on maturity, but investors should assume dilution in their 18month forward eps calculations
The 25 percent warrants deposit of the earlier qip will now be for UGRO to keep - investors should ensure thats the case.
Would be interesting to see the parties that have backed out of the earlier warrants - if its non board members especially Gauri Khan etc then its fine, but if its Sameena or Danish sustainability fund then its not fine.
The management appeared on NDTV profit just now to give their side of the story - this current dilution is not fully incremental as we were also assuming. Its mostly to replace the 750 crore of outstanding warrants some (or most) of which wont convert in December if stock price is near what it is. If stock price is significantly higher then dilution is also higher. The growth trajectory is intact and theres no NPAs (neither hidden nor gross) obviously. The 250 crores of warrant deposit remains within the networth as free money (risk premium that warrant investors paid looking at the nbfc funding market in 2024)
Back to my own opinion- Any layman investors who are assuming NPAs should consider how NPAs, days past dues and collections are monitored and reported by and to RBI. Plus if fraud was being perpetrated the board members would not subscribe another 650 crores. They are basically diluting the retail investors because the market is not sustaining the price of the previous warrants within a 25 percent band, with an option for those who are sophisticated to understand to opt in the rights issue or the RE shares.