Inox Wind Energy shares zoom 19% on merger with parent

Shares of Inox Wind Energy rallied nearly 19% to touch a new all-time high in intraday trade on Tuesday after the company announced merger with parent Inox Wind. The wind energy firm, which was incorporated in March 2020, will be merged with parent through a share swap. For every 10 shares of Inox Wind Energy, 158 equity shares of Inox Wind will be issued, as per an exchange filing.

Reacting to the news, Inox Wind Energy shares gained as much as 18.6% to hit a record high of ₹2,150 during the session so far. Earlier today, the stock opened at ₹1,950.05, up 7.6% against the previous closing price of ₹1,812.40 on the BSE.  The market capitalisation rose to ₹2,375 crore, with 6,453 shares changing hands over the counter as compared to the two-week average volume of 1,172 scrips.   

The counter has risen 385% in the last one year, from its 52-week low of 442.95 touched on June 23, 2022. In the last six months, the stock has gained 118%, while it jumped 68% in a month, and 27% in a week.

In sharp contrast, Inox Wind shares declined as much as 5.6% to hit an intraday low of ₹137.60 after opening marginally lower at ₹144.65 against the previous closing price of ₹145.75 on the BSE. Meanwhile, the BSE benchmark Sensex was trading 328 points, 0.52%, higher at 63,053 levels.

In an exchange filing on Monday, Inox Wind Energy informed exchanges that its board of directors at its meeting held on June 12, 2023, inter alia, approved the scheme of arrangement between Inox Wind Energy and Inox Wind, and their respective shareholders. The scheme is subject to approval from shareholders and creditors of the companies involved and nod from statutory and regulatory authorities, including approvals from Stock Exchanges, Jurisdictional National Company Law Tribunal, Chandigarh Bench (NCLT).

The deal will be completed through share swap, with 158 equity shares of Inox Wind being issued for every 10 equity shares of Inox Wind Energy.

Besides, Inox Wind will issue share warrants convertible into equity shares to every warrant holder of Inox Wind Energy in the ratio of 158 share warrants of IWL with an issue price ₹54 each for every 10 share warrants of IWEL with a price of ₹847 each.

IWEL is engaged in the business of generation and sale of wind energy, providing services for erection, procurement and commissioning (EPC) of wind farms and holding a strategic business interest in renewable energy. While IWL is in the business of manufacture and sale of Wind Turbine Generators (WTGs). It also provides EPC, operations & maintenance (O&M) and common infrastructure facilities services for WTGs and wind farm development services.

As per the company, the proposed arrangement would enable consolidation of the same line of businesses, pooling of homogeneous assets and expertise across the group. Besides, it will also improve the overall operational efficiency and effectiveness of the combined businesses as well as reduce the overall operational, administrative and compliance cost.

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