Charms Industries531327Preferential allotment

Board approves 24.37% promoter stake sale, mandatory open offer and two preferential issues

Board meeting on 23 October 2026 approved a change of promoters along with fresh fund-raising.

By ScoutQuest · Fri 23 Oct 2026, 7:40 PM IST · 3 min read

24.37%Stake acquired under the SPA

Stake acquired under the SPA: 24.37%.

Promoter stake sale under SPA: ~10 lakh shares — 24.37% of the existing share capital — to four proposed promoters
Preferential equity issue: up to 2.45 crore equity shares at ₹2/- each (₹4.9 crore)
Preferential warrant issue: up to 12.55 crore convertible warrants at ₹2/- each (₹25.1 crore)

The board of the company met on 23 October 2026 from 5:00 P.M. to 6:00 P.M. and approved a set of connected decisions that change who controls the company and bring in fresh money.

What the board approved

Increase in authorised share capital to ₹16.5 crore, divided into 16.5 crore equity shares of ₹1/- each, with a matching amendment to Clause V of the Memorandum of Association. This is subject to shareholder approval.
A Share Purchase Agreement for ~10 lakh equity shares, representing 24.37% of the existing share capital.
A preferential issue of up to 2.45 crore fully paid-up equity shares of face value ₹1/- each at an issue price of ₹2/- per share, aggregating up to ₹4.9 crore.
A preferential issue of up to 12.55 crore convertible warrants at ₹2/- per warrant, aggregating up to ₹25.1 crore, each warrant convertible into one equity share of face value ₹1/-.

Who is buying and who is selling

Sellers: Shivkumar R Chauhan and Nehal S Chauhan, who are part of the current promoter group.
Proposed acquirers: Mahendrabhai Gulabdas Patel, Munjal Mahendrabhai Patel, Sanjay Rameshchandra Patel and Rakesh Rameshchandra Patel. The update states they are not a related party to the company as of date.
The update states that, on consummation of the transaction, the acquirers will acquire control and become promoters, while the sellers will cease to be promoters or part of the promoter group and will be re-classified as public shareholders. The board is to be re-constituted after the transactions are completed.

Why an open offer follows

The update states that the execution of the Share Purchase Agreement and the proposed preferential issue of shares and warrants, in which the acquirers are also proposed allottees, have triggered an obligation on the acquirers to make an open offer under Regulations 3(1) and 4 of the SEBI (SAST) Regulations, 2011.

The preferential issues in numbers

Equity shares: up to 2.45 crore shares at ₹2/- each, up to ₹4.9 crore, to up to 11 proposed allottees. Four proposed promoters are listed for 50,00,000 shares each, and seven non-promoter allottees for between 5,62,500 and 7,50,000 shares each.
Warrants: up to 12.55 crore warrants at ₹2/- each, up to ₹25.1 crore, to up to 11 proposed allottees. The update states the warrants may be converted at the holder's discretion after the open offer is completed and before the expiry of the stated tenure from allotment, within a maximum of eighteen months from the date of allotment.
Both issues are at an issue price of ₹2/- per share and per warrant, determined under Regulation 166A read with Regulation 165 of the SEBI (ICDR) Regulations, 2018.

What still has to happen

Shareholder approval for the authorised capital increase, the preferential share issue and the warrant issue.
Completion of the open offer and receipt of approvals required under applicable laws, as stated in the update.
An Extra Ordinary General Meeting has been called for Monday, 23 November 2026 at 12 P.M. at the registered office, and M/s Nisarg Sharma & Associates, Practicing Company Secretaries, has been appointed as scrutinizer for the remote e-voting.

How a reader can look at this

This is a change-of-control update: the people who will run the company are changing, and the same incoming group is also putting in fresh money through shares and warrants. The two fund-raising items together are up to ₹4.9 crore in shares and ₹25.1 crore in warrants, and the warrants convert into equity only later, at the holder's option. The update also shows the proposed allottee list, which mixes the four proposed promoters with seven non-promoter names.

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