Shriram Transport shares gain 2% on funds raising plans via QIB, capital infusion by promoter
Shriram Transport Finance Corporation share price added over 2 percent in early trade on June 8 after the company said it is going to raise funds viavia qualified institutional buyers (QIB), and preferential allotment to promoter entity.
“… at its meeting held on June 7, the board has approved raising of funds by issuance of equity shares and warrants to Shriram Capital, promoter of the company, on a preferential basis,” company said in the release.
The floor price for per equity shares and warrants is Rs 1,439.90.
The board approved the issue price of the equity share at Rs 1,440 per equity share including premium of Rs 1430 per equity share.
The issue price of the warrant is Rs 1,440 per warrant (25% payable upfront and balance payable at the time of conversion into equity shares).
The company proposed to issue up to 17,36,100 equity shares at a price of Rs 1,440 per equity share, for an aggregate consideration of up to Rs 2,499,984,000.
The board proposed to issue up to 17,36,100 Warrants at Rs 1,440 per warrant aggregating to Rs 2,499,984,000.
The company board also approved the opening of the QIB issue and fixed a floor price of Rs 1,433.32 per share for the QIP offering.
The company may offer such discount on the floor price as may be approved by the Securities Issuance Committee in accordance with SEBI ICDR Regulations.
Jefferies
The brokerage maintained underperform call on the stock for a target of Rs 1,130 per share.
The fund raising will result in dilution of 7 percent on shares and it can lift FY22-23 profit by 6-9 percent and adjusted BVPS by 6 percent.
Tier-I CAR may rise by 100 bps & can support growth/ ratings, it added.
Morgan Stanley
Morgan Stanley has kept overweight call on the stock with a target at Rs 2,000 per share.
The promoter will invest Rs 500 crore via equity shares & warrants and this issuance should further help funding access & costs.
At 09:25 hrs, Shriram Transport Finance Corporation was quoting at Rs 1,489, down Rs 1.10, or 0.07 percent on the BSE.
The share touched a 52-week high of Rs 1,534.90 and a 52-week low of Rs 555.90 on 15 February, 2021 and 24 September, 2020, respectively.
Currently, it is trading 2.99 percent below its 52-week high and 167.85 percent above its 52-week low.
The post Shriram Transport shares gain 2% on funds raising plans via QIB, capital infusion by promoter first appeared on WorthStocks - Share Market Tips.
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