3i Infotech Limited Rights Issue 2025 — Detailed Overview
3i Infotech Limited, a Mumbai-based information technology and digital services company, is raising capital via a rights issue in October 2025. The rights issue is targeted at existing shareholders and is designed to strengthen working capital, support corporate purposes, and improve financial flexibility. This article unpacks the terms, dates, implications, financials, and risk vs. opportunity for eligible shareholders.
Company Background
- Founded: 1993 (originally as ICICI Infotech). Became a publicly listed independent IT services company.
- Business focus: The company trimmed its product division by divesting its software product business (Azentio Software) to sharpen focus on services.
- Service portfolio: Includes digital transformation, consulting, cloud and infrastructure services, analytics / automation, RPA, among others. Clients span BFSI, government, etc.
- Recent financials: For FY 2024-25, total income ~ ₹725.76 crore; profit after tax ~ ₹25.35 crore; net worth ~ ₹306.89 crore. Previous year revenues were ~₹813.88 crore with a large loss in FY-2023-24.
Terms of the Rights Issue
| Parameter | Detail |
|---|---|
| Issue size | ~ ₹64.10 crore |
| Number of shares offered | 3,77,08,165 equity shares |
| Face value per share | ₹10 |
| Issue price | ₹17 per share (i.e. premium of ₹7 over face value) |
| Rights ratio / Entitlement | 2 rights equity shares for every 9 fully paid‐up equity shares held as of record date |
Key Dates & Timeline
| Event | Date |
|---|---|
| Record date | 26 September 2025 |
| Rights issue opens for subscription | 6 October 2025 |
| Rights issue closes | 24 October 2025 |
| Last date to trade ex-right / Buy to qualify before record date | around 25 September 2025 (i.e. shares must be held before ex-rights date) |
| Tentative allotment date | ~ 27 October 2025 |
| Tentative credit to demat / listing date | ~ 28-29 October 2025 |
Purpose of the Rights Issue
As per the disclosures:
- To augment existing and incremental working capital requirement of the company.
- For general corporate purposes (which may include meeting expenses, business expansion, or other operational needs).
Financial & Valuation Implications
- Given the issue price ₹17, and recent trading prices (pre-rights announcement), the rights issue offers existing shareholders an opportunity to acquire shares at a discount.
- After rights issue, there would be dilution of existing holdings, but the exact dilution depends on how many existing shareholders exercise their rights. The entitlement ratio (2:9) implies some dilution if not fully subscribed.
Risks & Things to Watch
- Subscription risk: If many eligible shareholders do not subscribe, some rationing or unused quota may occur. Also, Rights Entitlements (REs) are tradable; their price and availability may be volatile. Financial health / performance volatility: 3i Infotech had loss in earlier years; profitability is just returning. Sustained performance is key.
- Market sentiment and technology sector pressures: Sector competition, customer shifts, delivery quality, cost overruns etc. can affect post-rights share price performance.
- Liquidity of Rights Entitlements: REs trade only for a limited period; shareholders need to act timely. Also, non-participation means losing potential benefit.
Who Stands to Benefit
- Existing shareholders who believe in the turnaround or long-term growth of 3i Infotech and want to maintain/increase their holding at a discount.
- Investors who can buy REs if they don’t hold enough shares and believe post-issue valuation will improve.
- Long-term technology sector investors who see value in digital transformation themes, especially in BFSI, automation, etc.
Verdict
The 3i Infotech rights issue appears to be a well-structured offering, especially for existing shareholders. The issue price is modest, and the discount may justify participation for many. However, benefits depend heavily on the company continuing to generate profitable growth, manage costs, and deliver operational improvements. If you are an existing shareholder, evaluating whether to subscribe or sell REs, this could be a worthwhile move. If you are not a shareholder, buying REs could be considered, but with attention to risk.
(Disclaimer: Recommendations, suggestions, views and opinions expressed by experts are their own. Investors are advised to consult certified financial advisors before making any investment decisions.)
