Suzlon Energy tanks 7% after right issue announcement

New Delhi: Shares of dropped more than 7 per cent during the early trade on Monday after the company announced to raise funds via the rights issue route.

In an exchange filing, the renewable energy firm announced that its board has approved raising Rs 1,200 crore via rights issue of 240 crore shares. The Securities Issue Committee of the board approved the rights issue.

The company will raise Rs 1,200 crore through the issuance of 240 crore shares with a face value of Rs 2 each at an issue price of Rs 5 per share, the exchange filing added.

Following the announcement, shares of Suzlon Energy plunged more than 7 per cent to Rs 8.44, before recovering to Rs 8.69 at 9.35 am. The scrip had settled at Rs 9.09 on Friday.

The price of the rights issue has been set at a discount of 45 per cent compared to its previous close. However, only eligible investors can participate in the fundraising plans.

The number of outstanding equity shares will increase from 1007,30,87,083 to 1247,30,87,083 after the issue, assuming full subscription. Five rights equity shares will be issued for every 21 fully paid-up equity shares held by the eligible shareholders.