HFCL shares rise 4% after firm launches QIP at premium; Axis Securities sees up to 126% upside

HFCL shares rise 4% after firm launches QIP at premium; Axis Securities sees up to 126% upside

Shares of HFCL Ltd rose 4% to Rs 66.5 apiece on December 23 after the technology gear maker launched its qualified institutional placement (QIP) of shares at a premium.

HFCL had set floor price at Rs 65.84 rupees per share, a 3% premium to its closing price on December 22.

A premium is generally seen as a positive as it suggests that stakeholders expect the stock's market worth to rise, indicating confidence in future prospects.

The company will use proceeds from the issue for purchase of plant and machinery for capacity expansion of optic fibre cables, expenditure towards R&D initiatives, repayment of borrowings and to fund long term working capital requirements.

So far in 2025, the stock fell 40%.

Domestic brokerage Axis Securities sees up to 126% upside for the stock.

"We are anticipating HFCL’s fund raise of Rs 500-600cr through QIP. HFCL’s revenue is expected to grow 20% YoY in FY26E, backed by up strong order book of Rs 9,891 crore. The company is expanding high fiber count cables capacity to 19 mn fkm/annum, and overall capacity is expected to reach 42.36 mn by June 2026," said the brokerage.

"The company got a 1,000-acre land allotment for a defence facility can be a multi-fold opportunity going forward. Defence revenue is expected to be Rs 200-crore plus in FY26E and Rs 500 crore in FY27E, supported by order book, large-scale programs like BMP-2 vehicle upgrade. Exports remain promising, and Rs 650 crore orders are executable by April 2026. The high-value passive connectivity solutions for data centers and the commencement of high-margin O&M contracts are additional growth drivers," the brokerage added.