Suzlon Energy shares jump 5% as firm launches Rs 2,000 crore QIP

Suzlon Energy shares jumped 5% to the day's high of Rs 20 in Thursday's early trade after the company's Board approved to launch qualified institutional placement (QIP) to raise up to Rs 2,000 crore.

The QIP will be of Rs 1,500 crore, with an oversubscription option of Rs 500 crore. The issue opened on Wednesday.

"The securities issue committee of the Board has decided to undertake qualified institutions placement of equity shares to an extent of up to Rs 1,500 crore, with an option to retain oversubscription of up to Rs 500 crore," the company said in a filing to exchanges on Wednesday, post the market hours.

The floor price for the same has been fixed at Rs 18.44, which is nearly a 6% discount from the current levels.

The stock witnessed a strong buying action with over 6.49 crore shares changing hands on the NSE around 9:35 am.
QIP is a capital-raising tool through which listed companies can sell shares, fully and partly convertible debentures, or any securities, other than warrants that are convertible into equity shares, to qualified institutional buyers.

Following a turnaround in the company's fortunes led by debt reduction, a strong order book, and a return to profitability, the stock has jumped more than 200% in the last year. It has doubled investors' wealth in the last six months.

Suzlon is a renewable energy solutions provider with a presence in 17 countries across Asia, Australia, Europe, Africa and America. It has become the first Indian wind energy company to reach 20 GW of worldwide wind energy installation and has a 33% cumulative wind energy market share in India.

For the recent first quarter, the company's profit declined 64% on a sequential basis to Rs 101 crore, while its revenue from operations dropped 20% quarter-on-quarter (QoQ) to Rs 1,378 crore.

"After a sustained effort to reduce debt in FY23, which has resulted in a healthier and sustainable balance sheet for the company, our focus in FY24 remains on funding our operations and fulfilling our commitments to customers and other stakeholders,” said Himanshu Mody, CFO, Suzlon Group.

The company said that it continues to maintain strict control on the costs and is in the process of further optimizing its organizational structure to drive excellence and continual improvement on the strong foundation set over the last three years.

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