Onward Technologies Ltd on Thursday said its board has approved raising Rs 70.2 crore from funds advised by Convergent Finance LLP.
Structured as a subscription to equity shares and warrants priced in accordance with applicable SEBI regulations, the investment will aggregate up to Rs 70.2 crore and result in an approximately 24.78 per cent ownership stake on a fully diluted basis, Onward said in a regulatory filing.
Customary closing conditions, including shareholder approval, will apply, it added.
A separate filing showed that the transaction will involve the allotment of 11 lakh equity shares at a price of Rs 130 and 43 lakh warrants (convertible into equity shares).
'This investment is a vote of confidence for the Onward Tech team, reinforcing the tremendous growth underway within our organisation. Onward Tech is already a cash positive company and the objective of raising additional cash is to strengthen our presence in India, the USA, and Europe,' Onward Technologies Managing Director Jigar Mehta said.
He added that the company's new international subsidiaries in Netherlands and Canada will also become fully functional next quarter.
'On the home front, after a successful launch in Bengaluru in January 2021, we plan to expand our portfolio of services into new territories Hyderabad and Noida in 2021, where we see a major opportunity for growth,' he said.
Devanand Ramandasani, CFO of Onward Technologies said the company has gone through a roller-coaster last few quarters with the pandemic.
Inspite of COVID-19 and challenges from work from home (WFH), the company has shown strong resilience and hired 500 engineers across the digital and engineering services verticals to support its fast-growing, multinational OEM customers, Ramandasani said.
'This new investment will help us accelerate both organic and inorganic growth opportunities in the digital ER&D industry,' Ramandasani said.
Harsha Raghavan, Managing Partner at Convergent, said Onward Technologies is one of the oldest and most well-established IT service companies.
'We will look to use our global networks, strategic insights, and operational expertise to help transform Onward Tech into a global leader in engineering R&D and digital transformation,' he added. Centrum Capital Ltd acted as the sole financial advisor and DSK Legal was the legal advisor to Onward Technologies for this transaction.