PG Electroplast opens QIP to raise up to Rs 1,500 crore, floor price Rs 705 per share

PG Electroplast

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Diversified plastic moulding and design company PG Electroplast has initiated an institutional placement of shares to QIBs at a floor price of Rs 705.18 per share, the company said on December 4, as it aims to raise up to Rs 1,500 crore.

The QIP will lead to an equity dilution of 6.7% stake, and the proceeds will be used for working capital requirement, loan repayment or other general corporate purposes. PG Electroplast had taken the board's approval on October 19, and shareholders' nod for the share placement through a special resolution on November 13.

CNBC-TV18 quoted sources who suggested that the indicative issue price of the QIP is at Rs 690-699 per share.

The management during the earnings call in November that it is seeing some 'very significant growth opportunities' coming its way. "...if as and when they kind of materialize, we will be utilizing that money for capex and working capital." PG Electroplast also denied plans for any inorganic route for growth.

Read More: PG Electroplast Q2 – Outperformance continues

On the company's planned capex of Rs 380 crore for the year, the management said they are on track to meet the guidance.

"Out of the Rs 370-380 crore capex, we are putting up about close to Rs 165 crore in the product business for expanding the capacities and this will be for the plant and machinery in the product side of the business. About Rs 185 crore will be going into the acquisition of land and making of buildings, which is the infrastructure side, and the rest will be about Rs 20 crore-odd which we will be expecting to invest in some basically maintenance capex as well as some small capex on the plastic component side, especially on the sanitary wear. This is the breakup, and some amount has already been spent," PG Electroplast had said in November.