Zen Tech shares surge to all-time high on fundraising via QIP

Zen Technologies shares surged 5% to an all-time high of ₹1863.35 on the NSE today after the company announced fundraising via qualified institutional placement (QIP) issue on August 21, 2024. The surge came after the aerospace and defence giant’s fundraising committee approved the QIP issue, setting the floor price at ₹1,685.18 per share with a potential discount of up to 5%. The issue, opened yesterday, is expected to raise ₹800 crore, with the potential to increase to ₹1,000 crore.

Shares of the company opened at ₹1,774.50 on the NSE today, however are currently trading at ₹1,758.10, down 1% from the previous close. The company presently has a market capitalisation of ₹14,880.46 crore. Since November last year, the company’s shares have surged nearly 137%.

In January, the company's board of directors approved raising to ₹1,000 crore through an issue of equity shares or other securities. Shareholder approval was subsequently obtained in March.

As of June 30, 2024, the company's promoters held over 55% of the shareholding, with less than 1% held by employee trusts. The remaining 44.4% of the shares were held by the public.

Zen Technologies offers defence training solutions, including simulators, sensors, and anti-drone systems. The company supports the Ministry of Defence, security forces, and paramilitary units with land-based military training simulators, driving simulators, and live range equipment. Based in Hyderabad, Zen Technologies operates a dedicated R&D facility, holds over 155 patents, and has delivered more than 1,000 training systems globally. On August 19, 2024, the company was granted another patent in India for its advanced mine detection system.

Sales and total revenue grew by almost 90% year-over-year to ₹254.62 crore and ₹257.73 crore respectively in the first quarter of this fiscal. Despite this strong revenue growth, operational EBITDA margins declined to 43.73% from 52.03% in the same quarter last year. Nevertheless, consolidated net profits increased by 63%, rising to ₹76.82 crore from ₹47.09 crore in the previous year.