Sona BLW jumps 3% as firm raises Rs 2,400 crore via QIP; stock up 13% so far in 2024

So far this year, shares of Sona BLW surged over 13 percent

Shares of Sona BLW Precision Forgings jumped over 3 percent to Rs 738 apiece on September 11 after the company successfully raised Rs 2,400 crore through a Qualified Institutional Placement (QIP) of equity shares. Among the key investors, SBI Mutual Fund secured a quarter of Sona BLW’s equity issue, while ICICI Prudential Fund acquired 8.33 percent of the shares.

The company approved the issuance of 3.47 crore equity shares to eligible institutional buyers at Rs 690 per share. This issue price represented a 1.3 percent discount to the floor price of Rs 699.01 and a 3 percent discount compared to the previous day's closing price of Rs 713.

Sona BLW intends to utilise the funds from the QIP to strengthen its capital structure and support both its organic and inorganic growth strategies. Jefferies India and JM Financial acted as the Book Running Lead Managers for the QIP, while Shardul Amarchand Mangaldas & Co. served as the Legal Counsel for the company.

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In the June quarter, Sona BLW reported a 26.7 percent year-on-year increase in net profit to Rs 142 crore, with revenue from operations rising 21.8 percent YoY to Rs 891 crore. The company’s EBITDA grew by 23.1 percent YoY to Rs 249 crore, with margins at 28 percent in Q1FY25.

LKP Securities analysts maintained a 'neutral' rating on the stock with a target price of Rs 716 apiece. They noted that while near-term revenue growth may fall slightly below market expectations due to softening BEV volumes in Europe and the US, medium-term growth prospects remain strong, driven by a robust order book, increased BEV mix, higher content per vehicle, and ramping up of new orders.

So far this year, shares of Sona BLW surged over 13 percent, slightly underperforming benchmark Nifty 50's 15 percent surge.

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