Active Clothing Co hit its upper limit of 5% at Rs 126.15 on March 10, 2025, following the announcement of its plan to raise funds via the preferential allotment of 500,000 warrants. Each warrant is convertible or exchangeable for one fully paid-up equity share of the company, with a face value of Rs 10, at a conversion price of Rs 150 per share, totaling to Rs 7.50 crore.
The warrants are intended for allocation to non-promoter stakeholders, with 250,000 warrants (representing 1.56% of the company) allotted to Saajan Subhash Rathod and another 250,000 warrants (also 1.56%) to Mayank Subhash Rathod. This financial maneuver is expected to bolster the company's financial flexibility, aiding its innovative "design-to-shelf" operations as it aims to expand its capacity.
Rajesh Mehra, managing director of Active Clothing Co, commented on the development, stating, "The funds will be allocated prudently supporting our day-to-day operational expenses and driving ... sustainable value to all our stakeholders." He emphasized the necessity of this financial support for maintaining the company's edge in the competitive market.
Active Clothing Co is recognized as one of India's premier apparel manufacturers headquartered in Mohali, Punjab. The firm specializes in producing flat-knitted sweaters, jackets, and circular-knitted t-shirts and sweatshirts, serving leading global fashion brands. Boasting fully integrated "design-to-shelf" offerings, the company provides comprehensive services encompassing design, manufacturing, and retail.
Recently, the firm reported remarkable financial growth, with its net profit soaring 223% to Rs 3.14 crore during Q3 of December 2024, compared to the same period last year. Likewise, net sales experienced an impressive rise of 88.89%, reaching Rs 99.94 crore.
This track record of growth has allowed Active Clothing Co to position itself strategically within the global market, and the recent capital raise aims to secure the required resources to facilitate operational and capital investments. Rajesh Mehra reassured stakeholders of their commitment to scale operations adequately, reflecting on the rising global demand for their innovative product range.
“The funds will enable us to not only meet rising demand but also to reinforce our operational efficiencies,” he added.
The allocation of warrants also indicates the growing confidence from stakeholders which is aligned with consistent growth metrics the company is experiencing. By targeting non-promoter participants, Active Clothing Co aims to broaden its financing base and potentially diversify its investor pool.
It is also notable to highlight how the strategic issuance of warrants is subject to necessary shareholder approvals, ensuring proper governance and stakeholder agreement on this significant financial step.
The apparel industry, especially manufacturers like Active Clothing Co, is witnessing increasing interest, thanks to their ability to adapt to market needs and exploit design innovations effectively. The funds from the current preferential allotment are expected to propel the company's operations and improve overall competitiveness as they work on additional production capacity.
Given the current dynamics of the global fashion industry, companies willing to invest strategically, as Active Clothing Co is doing, could find themselves reaping substantial benefits. This prefunded growth approach aligns with the increasing trend of quality and efficient production as consumers demand not only appealing designs but also sustainable practices.
Investors and stakeholders are now closely watching how this strategic maneuver will influence the company's footprint within the expansive global apparel market as the firm continues to innovate and expand its offerings.