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Bangalore-based Valuemart Retail Solutions Ltd (formerly Residency Projects & Infratech Ltd) is raising Rs 10 crore through a preferential issue of shares to its promoters and few individual investors, the company has disclosed in a statement to the Bombay Stock Exchange.

The company plans to issue 20 lakh equity shares at a price of Rs 50 per unit, comprising a nominal value of Rs 10 and a premium of Rs 40.

Incidentally, the firm is also in the process of raising around Rs 12 crore through a rights issue.

As the company's current market value stands at Rs 5 crore, raising the above amount will translate into a huge equity dilution. Shares of Valuemart closed at Rs 43.40 a piece in a strong Mumbai market.

The share sale proceeds will be used to extend Valuemart’s footprint in travel and hospitality sectors. The company will set up offices and travel lounges across the country in order to increase its turnover and profitability.

Founded by CK Vasudevan in 1985, Valuemart offers B2C solutions, RFID solutions, smartcards and Web-based solutions for retail and financial services sectors. But earlier this year, the company had acquired Bangalore-based online travel portal BonVoyage.in for an undisclosed amount and the venture has helped it expand in travel and hospitality space.

Incidentally, BonVoyage provides a plethora of travel-related services such as booking facility, holiday packages and car rentals – both for domestic and international travel.

“Travel in India is experiencing a strong period of growth, driven by the burgeoning middle class and growth in high-spending foreign tourists. We hope to capitalise on this business opportunity,” said founder and managing director Vasudevan.

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