The Hella Infra Story: When Shares Don’t Move in Sync

 The Hella Infra Story: When Shares Don’t Move in Sync

Imagine a company where two types of shareholders are standing on two very different escalators.

Act 1: The Valuation That Froze Everything
On 30 June 2025, Hella Infra received a valuation report.
At that point:

• The company had 3.5 lakh equity shares
• It also had CCPS, each valued at ₹2.13 lakh+
• This valuation became the reference price for all subsequent CCPS issuances.

Act 2: Two Corporate Twists

CCPS Continued at the Old Valuation
Between July and September, additional CCPS were issued using the same June valuation.
There were no revisions or discounts—the pricing remained unchanged.

A Large Bonus Issue for Equity (800:1)
Equity shareholders received 800 shares for every 1 share held.
As a result, the equity share count jumped from 3.5 lakh to 2.83 crore.
CCPS holders did not receive any benefit from this bonus since the CCPS had not yet converted and the DRHP remains confidential.

Act 3: The Overlooked Mismatch

This created a clear divergence:

Equity shares became significantly cheaper due to the bonus issue.

CCPS remained expensive, locked at the pre-bonus valuation.

Two share classes now reflected two very different economic realities. When investors treat them as comparable, valuation distortions arise.

Act 4: What This Means for Investors

If one:

• Uses the post-bonus equity share count, and
• Applies the pre-bonus CCPS valuation,
• the resulting per-share value will be incorrect and overstated.

In simple terms:

• Equity investors operate in a post-bonus environment.
• CCPS investors paid pre-bonus prices.
• These instruments are not directly comparable.

Act 5: The Investor Checklist

• The bonus issue strongly favored equity shareholders.
• CCPS issued at earlier valuations now appear expensive.
• Direct comparisons between equity and CCPS can create valuation illusions.
• Always be clear about the instrument you are investing in—each carries different rights and risks.

Investment logic differs by instrument:

Equity: cheaper, diluted, bonus-adjusted

CCPS: expensive, pre-bonus, awaiting conversion

Source: https://unlistedzone.com/when-valuation-meets-reality-the-equitypreference-puzzle-at-hella-infra