CG Power Launches Rs 3,000 Crore QIP, Announces Floor Price

CG Power and Industrial Solution Ltd. announced the launch of its qualified institutional placement on Monday to raise funds of up to Rs 3,000 crore.

The floor price for the Murugappa Group unit's QIP has been fixed at Rs 679.08 per share, which is around 0.45% lower than the stock's closing price of Rs 682.15.

At full subscription, the QIP will result in 2.89% dilution of the company's share, as per the term sheet accessed by NDTV Profit.

IIFL Capital Services Ltd., DAM Capital Advisors Ltd. and HSBC Securities and Capital Markets (India) Pvt. are the book-running lead managers of the QIP.

The company may offer a discount of not more than 5% on the floor price calculated for the QIP, according to an exchange filing by the company on Monday. Additionally, the indicative issue price is set at Rs 660 apiece, marking a 3.25% discount as against the last closing price.

The company, earlier this month, secured its highest single order worth Rs 641 crore from Power Grid Corp. to supply transformers and reactors. The company will deliver 765/400 KV 1-ph transformers under the corporate package for procurement of 765kV and 400kV class transformers and reactors of various capacities.

The supply of these machines is expected to be completed in 18 to 36 months.

Shares of CG Power on Monday closed 1.48% higher at Rs 682.15 per share. This compares with a 0.47% decline in the benchmark Nifty 50. The stock has fallen 3.20% in the last 12 months and 6.30% year-to-date.

Out of 12 analysts tracking the company, nine maintain a 'buy' rating and three suggest 'sell,' according to Bloomberg data. The average of 12-month consensus price target implies an upside potential of 4.5%.