PepsiCo's bottling franchise partner Varun Beverages Ltd. has set the floor price for its Rs 7,500-crore qualified institutional placement at Rs 594.56 per share. The floor price is at a premium of 4.66% to Wednesday's closing price of Rs 568.10 per share on NSE.
The company will issue 13.27 crore shares having a face value of Rs 2 each. This includes 3.5 crore shares green shoe option.
The company may, at its discretion, offer a discount of not more than 5% on the floor price so calculated for the issue, according to an exchange filing. A minimum of 10% of the shares under QIP would be allotted to mutual funds.
The board of directors approved the fundraise on Oct. 9. The funds may be raised in one or more tranches by issue of equity shares and or any other instruments or eligible securities representing either equity shares and/or convertible securities linked to equity shares, an earlier filing said.
The company is launching the QIP to implement its growth plans and to strengthen its balance sheet. The company intends to use the proceeds to make investments in subsidiaries, joint ventures or associates or to fund the growth of existing businesses. The funds will also help in pre-payment or repayment of debts the company added.
The shares of Varun Beverages were trading lower on Monday. The shares fell as much as 3.30% during the day to Rs 565 apiece on the NSE. It closed 2.77% lower at Rs 568 apiece. This compares to a 1.80% decline in the NSE Nifty 50 Index. It has risen 40.79% in the last 12 months and 14.31% year-to-date.
Out of 24 analysts tracking the company, 21 maintain a 'buy' rating and three recommend a 'hold,' according to Bloomberg data. The average 12-month consensus price target implies an upside of 24.1%.
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