Defence Tech Stock Alert: Rs 300 Crore Fundraise Plan To Fuel Growth Push

Rossell Techsys Ltd will seek shareholder approval on October 15, 2026, for a preferential issue of 25,72,898 equity shares that could raise nearly Rs 300 crore in cash, with the bulk of the proceeds earmarked to strengthen its balance sheet.

The Aerospace, Defence, Semiconductor and space-focused engineering manufacturer proposes to issue the shares at Rs 1,166 each, including a premium of Rs 1,164 per share. The price is marginally above the calculated regulatory floor price of Rs 1,165.72, based on September 15, 2026, as the relevant date.

SBI Mutual Fund, through six schemes, is proposed to subscribe to 23,15,609 shares for about Rs 270 crore. SBI Optimal Equity Fund-Long Term, a scheme under SBI Alternative Equity Fund, is proposed to receive 2,57,289 shares for nearly Rs 30 crore. Both investors are classified as non-promoter qualified institutional buyers.

The proposed capital infusion is notable because Rossell Techsys has been scaling an inventory-intensive manufacturing business. It reported consolidated borrowings of Rs 409.41 crore as of March 31, 2026, while net debt stood at Rs 361.91 crore. At least Rs 230 crore from the proposed issue has been earmarked for repayment or prepayment of existing borrowings within six months of listing and trading approvals.

Based on the March 31 borrowing figure, the debt-repayment allocation is equivalent to around 56 per cent of reported borrowings, although the company's debt position could change before the funds are deployed. The balance of up to Rs 69.99 crore will be used for general corporate purposes within 12 months of receiving listing and trading approvals. The company has said allocations for each object could vary by up to 10 per cent.

The fundraising comes after a sharp expansion in Rossell Techsys' operations. Consolidated revenue from operations rose 86.8 per cent to Rs 485.12 crore in FY2025-26, while profit after Tax increased to Rs 21.89 crore from Rs 7.91 crore a year earlier. However, the growth also required sizeable investment in inventory and receivables, contributing to an operating cash outflow of Rs 82.80 crore during the year.

In the latest reported quarter, net sales rose 77.11 per cent year-on-year to Rs 154.46 crore, while operating profit before interest, depreciation and tax, excluding other income, more than doubled to Rs 22.18 crore. Profit after tax rose 116.44 per cent year-on-year to Rs 7.13 crore, though it was marginally lower sequentially.

The preferential issue will increase the company's equity share capital to 4,02,69,373 shares from 3,76,96,475 shares. It represents dilution of 6.39 per cent of the pre-issue equity capital. Promoter holding would decline to 65.43 per cent from 69.90 per cent, while institutional ownership would rise to 12.51 per cent from 6.54 per cent.

SBI Mutual Fund schemes would hold 5.75 per cent of the enlarged capital, while SBI Optimal Equity Fund-Long Term would hold 0.64 per cent. The allotment will not result in any change in management control, which will remain with the existing promoter group.

The new shares will rank pari passu with existing equity shares and carry a six-month lock-in from trading approval. CARE Edge Advisory & Research has been appointed to monitor utilisation of the proceeds and will issue quarterly monitoring reports until full deployment.

As of 3:52 pm on September 22, 2026, Rossell Techsys shares were trading at Rs 1,494.90, up 10.12 per cent from the previous close. The stock has gained 95.46 per cent over the past year, compared with a 3.73 per cent decline in the BSE 500, representing an outperformance of about 99.19 percentage points.

Disclaimer: The article is for informational purposes only and not investment advice.