Shares of Venus Pipes & Tubes Ltd rallied over 8 percent on February 29 after the stainless steel manufacturer entered the fittings business and expanded capacity for pipes and tubes.
The stock hit a high of Rs 1,875 and gained as much as 8 percent intraday. At 9.50am, the stock was trading at Rs 1,865 on the BSE, up 7.3 percent from its previous close, while the benchmark Sensex gained 0.07 percent to hit 72,356 points.
Fittings play a crucial role in industrial piping by enabling fluid or gas connection, redirection, and control. The company's entry into this sector aims to strengthen its position in the industrial business.
MD Arun Kothari of Venus Pipes & Tubes states that fittings complement their pipe business, offering complete PFF solutions. The expansion includes introducing a new line of stainless and titanium welded tubes, enhancing profitability. This two-phase capacity expansion, focusing on value-added fittings and welded tubes, will be completed by March 2025 and December 2025, respectively.
The firm also said it is implementing a Rs 175-crore capex plan to boost the capacity. The first phase is likely to require an investment of Rs 115 crore. Around 40 percent of the capex involves issuing 4.2 lakh convertible warrants at Rs1,700 each, raising Rs 71.4 crore.
This, along with term loans and internal accruals, funds the expansion. Kothari mentions the move opens doors for diversification into critical sectors like food processing, pharma, nuclear, and power.
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