Veteran investor Ashish R Kacholia, known for his keen eye in identifying promising mid-cap and small-cap stocks, has significantly increased his stake in Cosmic CRF Limited. This strategic move came through a preferential allotment of 619,600 equity shares, which took place on March 10, 2025, and was disclosed to the stock exchanges on June 9, 2025, under SEBI's Regulation 29(2).

Detailed Breakdown of the Transaction

Ashish Kacholia, along with Persons Acting in Concert (PACs)—RBA Finance & Investment Company, Dar's Business Finance Private Limited, and Everest Finance & Investment Company—held 1,070,800 equity shares in Cosmic CRF before the transaction. That represented:

• 11.6548% of the issued equity capital

• 11.2684% of the diluted equity capital

After the preferential allotment of 619,600 shares, their total holding rose to:

• 1,690,400 shares

• 18.3986% of the issued equity capital

• 17.7887% of the diluted equity capital

This acquisition was significant because it exceeded the 2% threshold, triggering the mandatory disclosure norms under SEBI’s Substantial Acquisition of Shares and Takeovers (SAST) Regulations, 2011.

Understanding the Preferential Allotment

Cosmic CRF undertook a preferential allotment to raise capital from select investors. Before this issue, the company’s total issued equity capital stood at 8,198,000 shares (Rs. 81.98 crore). Ashish Kacholia’s pre-acquisition holding was 13.06% at this stage.

Post allotment, the issued capital increased by 989,643 shares, taking the total to 9,187,643 shares (Rs. 91.88 crore). Of the newly issued shares, 619,600 were allotted to Kacholia and PACs, which significantly amplified their ownership.

Issued vs Diluted Capital

The distinction between issued and diluted capital is essential to understand investor control in a company:

• Issued Capital: 9,187,643 equity shares post allotment

• Diluted Capital: 9,502,643 equity shares (includes 315,000 outstanding convertible instruments)

Kacholia's holding on a diluted basis stands at 17.7887%, indicating that even if all convertible instruments are exercised, his influence remains substantial.

Implications of SEBI Regulation 29(2)

SEBI requires investors who own 5% or more in a listed entity and who acquire or dispose of shares amounting to 2% or more of the voting rights to file a disclosure. Ashish Kacholia’s acquisition easily crossed this threshold, hence the disclosure filed on June 9, 2025.

These disclosures help ensure transparency, provide insights to retail investors, and maintain fairness in public shareholding patterns.

Why the Market Watches Kacholia’s Moves

Ashish Kacholia is often referred to as a 'whale investor' in India’s midcap and smallcap space. His portfolio includes multibagger stocks in sectors like manufacturing, textiles, and chemicals. His entry or increased stake in any stock is seen by investors as a vote of confidence in the company's future.

By increasing his shareholding in Cosmic CRF, Kacholia is likely signaling his belief in the company’s business fundamentals, growth potential, and financial health.

Who Are the PACs Involved?

The transaction involves PACs (Persons Acting in Concert) who are closely linked with Kacholia. These include:

• RBA Finance & Investment Company

• Dar's Business Finance Pvt. Ltd.

• Everest Finance & Investment Company

Their role in this preferential allotment indicates a coordinated investment strategy, likely intended to strengthen their collective influence over company affairs.

About Cosmic CRF Limited

Cosmic CRF is a BSE-listed company engaged in precision cold roll forming for sectors such as railways, construction, and heavy engineering. The company has steadily scaled up its production capabilities and is positioning itself as a key player in infrastructure-related manufacturing.

The increased capital via preferential allotment is expected to:

• Support growth and expansion plans

• Strengthen the balance sheet

• Improve the company’s working capital

Why This Acquisition Matters

This preferential allotment achieves several strategic objectives:

• Provides long-term capital to the company

• Aligns with investor confidence, especially with participation from a reputed investor

• Increases public visibility and potentially improves market valuation

For Kacholia, it’s a bet that could yield significant returns if Cosmic CRF delivers on performance.

Conclusion and Way Forward

Ashish Kacholia's increased stake in Cosmic CRF Limited marks a key event in the company's journey. His 18.3986% shareholding gives him a significant voice in strategic decisions. This also underscores how preferential allotments can serve as important mechanisms for capital infusion, investor alignment, and long-term value creation.

For retail investors, it’s worth keeping an eye on:

• Future board announcements

• Utilisation of the raised funds

• Company’s upcoming financial results

Additionally, such developments signal a healthy interest from marquee investors in India’s industrial manufacturing space, potentially opening new opportunities for other strategic partnerships or further investments.

The Upcoming IPOs in this week and coming weeks are Eppeltone Engineers, Aten Papers & Foam, Patil Automation, Oswal Pumps, Samay Projects Services, Monolithisch India.

The Current active IPO are Jainik Power Cables, Sacheerome Limited.

Start your Stock Market Journey and Apply in IPO by Opening Free Demat Account in Choice Broking FinX.

Join our Trading with CA Abhay Telegram Channel for regular Stock Market Trading and Investment Calls by CA Abhay Varn - SEBI Registered Research Analyst.