Wockhardt shares took a hit and tanked as much as 4.5 percent on November 7, as investors dumped the stock after the company launched a Qualified Institutional Placement (QIP) at a floor price that offers a steep discount from the previous closing level.
The QIP is aimed to raise up to Rs 1,000 crore ($119 million), with an additional greenshoe option of Rs 200 crore. The issue price is set at Rs 1,105 per share, offering a 4.93 percent discount to the prescribed floor price of Rs 1,162.25 per share and marks a 12.98 percent discount from Wockhardt’s previous closing price of Rs 1,269.85 on the NSE.
Meanwhile, the QIP is also expected to dilute 5.57 percent of Wockhardt’s post-issue paid-up equity capital. The company stated that the funds raised will be used to strengthen its capital structure, potentially supporting growth initiatives or reducing existing liabilities.
At 09.52 am, shares of Wockhardt were trading at Rs 1,216.70 on the NSE. Wockhardt shares are a multibagger, delivering over 400 percent returns in the past year.
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Previously, the company had done another fundraise in March this year, where it saw top investors Madhusudan Kela and Prashant Jain contribute to the Rs 480-crore QIP.
Wockhardt has been actively exploring fundraising options to bolster its balance sheet and support ongoing projects. In 2020, the company raised approximately Rs 1,850 crore through the asset monetisation and sale of its branded generics business in select emerging markets to Dr Reddy’s, using the proceeds to reduce debt and improve liquidity.
Additionally, Wockhardt announced in September that its investigational drug, Zaynich, has successfully treated critically ill patients with drug-resistant meningitis. The company has also generated optimism around two promising antibiotics, which are nearing a potential launch in India.
Also Read | Wockhardt shares skyrocket nearly 40% in five days as two crucial antibiotics inch closer to launch
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