Suzlon Energy shares jump 5% on fundraising via QIP

Shares of Suzlon Energy rallied up to 5% in early trade on Thursday, in an otherwise weak broader market, after the wind turbine manufacturer unveiled a plan to raise up to ₹2,000 crore through qualified institutional placement (QIP). The board has decided to undertake QIP of equity shares to an extent of up to ₹1,500 crore, with an option to retain oversubscription of up to ₹500 crore, the renewable energy solutions provider said in an exchange filing on Wednesday.

The floor price of the QIP, having a face value of ₹2 each, has been fixed at ₹18.44 apiece, which is a 5.7% discount to Suzlon Energy’s closing price of ₹19.56 on Wednesday on the BSE. The company said it may offer a discount of not more than 5% on the floor price calculated for the Issue.

In a separate stock exchange filing, Suzlon said, “A meeting of the Securities Issue Committee of the board of directors of the company is scheduled to be held on August 14, 2023 to, consider and approve the issue price, including a discount, if any thereto, as permitted under the SEBI ICDR Regulations, for the equity shares to be allotted to qualified institutional buyers, pursuant to the issue.”

Following the announcement, Suzlon Energy shares gained as much as 5% to ₹20.53 after opening higher at ₹19.97 on the BSE. The stock touched its upper circuit limit of 5% for the second consecutive session. The midcap stock hovers near its 52-week high of ₹20.80 touched on August 25, 2022, while it has more than tripled from its 52-week low of ₹6.60 hit on October 13, 2022.

The counter witnessed strong volume as 5.04 crore shares changed hands on the BSE against two-week average volume of 4.38 crore stocks. The market capitalisation increased to ₹25,501 crore.

The share price of Suzlon Energy has nearly tripled in the last three months from ₹8.2 on May 16 after the net worth of the country’s largest wind turbine maker turned positive after a decade, posted profits after six years and orders doubled in the last three months. The company turned positive after a decade at ₹1,099 crore by end-FY23, while net debt reduced to ₹1,180 crore in FY23, from ₹13,003 crore in FY20, thanks to a recent rights issue and refinancing in May 2022 replacing 16 lenders with just two new lenders.

In October 2022, Suzlon raised ₹1,200 crore through rights issue by issuing 240 crore partly paid‐up equity shares at a price of ₹5 per rights equity share to the eligible equity shareholders of the company.

Last month, Suzlon released its earnings report for the first quarter of the current fiscal, which showed that its consolidated net profit dropped sharply by 96% to ₹101 crore, compared to ₹2,433.33 crore in the corresponding period last year. Revenue from operations stood at ₹1,347.52 crore in Q1FY24, down 2% compared to ₹1,377.58 crore in the year-ago period. On the operating front, the earnings before interest, taxes, depreciation, and amortisation (EBITDA) stood at ₹207 crore, while margins came in at 15.4% during the quarter under review.

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