Shares of Suzlon Energy surged nearly 5% in opening trade on Thursday after the renewable energy company unveiled a plan to raise funds via a rights issue. The wind component manufacturer aims to garner ₹1,200 crore through the rights issue to the eligible equity shareholders of the company. The issue will open for subscription on October 11 and will close on October 20. The funds raised through the issue will be partially used to repay loans and meet general corporate purposes, subject to receipt of consent from its lenders.
Cheering the news, Suzlon Energy share price opened higher at ₹8.32 against the previous closing price of ₹8.11 on the Bombay Stock Exchange. The stock gained as much as 4.9% to hit a high of ₹8.51, while market capitalisation increased to ₹8,154 crore. The counter saw a trend reversal with shares gaining after four sessions of consecutive falls. It has dropped 13.6% in a week, while it has risen more than 3% in the past one month. The smallcap stock has delivered 29% returns in the last one year, while it has fallen 19% on a year-to-date (YTD) basis. It hit a 52-week high of ₹13.10 on January 18, 2022, and a 52-week low of ₹5.91 on July 28, 2022.
In a filing to the BSE, the renewable energy company said it will issue up to 240 crore partly paid-up equity shares of the face value of ₹2 each of its company for cash at a price of ₹5 per rights equity share, aggregating up to ₹1,200 crore on a rights basis. The entitlement for the rights equity shares will be in the ratio of 5 rights equity shares for every 21 fully paid-up equity shares held by the eligible equity shareholders on the record date.
“The company will issue up to 2,400,000,000 partly paid-up equity shares for cash, at a price of ₹5 per rights equity share (including a premium of ₹3 per rights equity share) aggregating up to ₹1,200 crore on a rights basis to its eligible equity shareholders in the ratio of 5 rights equity shares for every 21 fully paid-up equity shares held by the eligible equity shareholders on the record date, that is on Tuesday, October 4, 2022,” Suzlon Energy said.
The last date of on-market renunciation of rights entitlements is October 14, 2022,” it added.
Post completion of the issue, the number of outstanding equity shares of the company will increase from 1,007.31 crore to 1,247.31 crore after the completion of the issue (assuming full subscription and receipt of all call monies with respect to equity shares allotted pursuant to the rights issue).
As per the release, the promoters and promoter group have confirmed their participation and they will be fully subscribing to the extent of their rights entitlement.
“The funds raised through the Issue will be used for repayment or pre-payment of a portion of certain outstanding borrowings availed by the Company and its subsidiaries and for general corporate purposes, subject to receipt of consent from our lenders,” the company said.
Inga Ventures Private Limited is the lead manager to the issue.
For the April-June quarter of the current financial year (Q1 FY23), the company reported multi-fold growth in its consolidated net profit to ₹2,433 crore as compared to ₹3 crore in the same period last year, helped by exceptional gains. Total income increased to ₹1,378 crore in the quarter, up 21% from ₹1,135 crore a year ago. EBITDA grew 39% year-on-year to ₹ 214 crores in Q1 FY23, while EBITDA margin stood at 15.6%.
Suzlon Energy is one of the leading renewable energy solutions providers in the world with a presence in 17 countries. Headquartered in Pune, the company has the largest wind-installed base as a wind energy OEM with approximately 13.45 GW of installed capacity in India as of June 30, 2022. Besides, it has an installed capacity of approximately 5.96 GW outside India, aggregating to a global installed capacity of approximately 19.41 GW globally.
