IT consulting firm Black Box Limited has announced that it is raising Rs 410 crore through a preferential issue to support its growth and expansion in the digital infrastructure sector. The company’s Board of Directors approved the issuance of 98,32,123 fully convertible warrants at a price of Rs 417 per warrant, aggregating to Rs 410 crore. These warrants can be converted into equity shares of face value Rs 2 each at a premium of Rs 415 within 18 months from the date of allotment, in accordance with SEBI ICDR Regulations.
The funding round is structured with Rs 200 crore from existing promoters, Rs 200 crore from a consortium of foreign institutional investors and high-net-worth individuals, and Rs 10 crore from key management personnel.
According to the company, the promoter shareholding will slightly decrease from 71.1% to 69.8% after the conversion of warrants into equity. Black Box continues to be a significant investment for Essar in the technology sector.
In recent years, Black Box has focused on improving its margins through cost rationalisation and productivity enhancements. This strategy has resulted in increased EBITDA margins and Profit after Tax (PAT).
The company reported an EBITDA of Rs 428 crore in FY24, marking a 59% increase from FY23, and a PAT of Rs 138 crore in FY24, which is 5.8 times higher than the previous year. The company expects this growth momentum to continue in the current financial year.
The capital raised will be allocated to several key areas. IT major plans to expand its data centre build capabilities to meet the growing demand driven by cloud and AI adoption. Additionally, the company will advance its network infrastructure by expanding its solutions portfolio for enterprise customers and data centre operators, including connectivity infrastructure and networking.
A portion of the funds will also support innovation and development in digital infrastructure solutions, such as cloud computing, cybersecurity, artificial intelligence, and IoT. In addition, the investment will aid the company’s strategic expansion into key industry verticals, leadership hiring, and sales and business development efforts in North America and emerging markets.
“We are thrilled to have secured this capital, which will enable us to embark on an ambitious growth trajectory and enhance our digital infrastructure offerings,” said Black Box CEO Sanjeev Verma.
Black Box, which has around 4,000 professionals globally, offers services in network integration, digital connectivity infrastructure, data centre build-out, modern workplace, and cybersecurity across various industries including financial services, technology, healthcare, retail, public services, manufacturing, and others.
