Tirupati Graphite has raised £1 million gross through a private placing at 11p per share, a discount of 8.33% to the closing mid-market price yesterday.
In addition, directors and other creditors have agreed to take shares instead of fees and salaries totalling £623,000.
Proceeds for the placing have been earmarked for optimising graphite production in Madagascar.
Tirupati added that no capital has been raised against its convertible loan rather it has set it aside to focus on arranging bank finance and other non-dilutive sources of capital.
Shishir Poddar, executive chairman, added: "Since the beginning of the current financial year, when we had completed the developments initiated after listing in December 2020, we have continued to ramp up operations at our projects despite having limited cash resources.
The placing and subscription will enable us to focus on increasing production and sales from our Madagascar operations which have been restricted due to limited working capital availability."