KEC International Plans Rs 6,000 Crore Fundraising Initiative

KEC International Ltd., a flagship company of the RPG Group, is involved  in infrastructure engineering, procurement, and construction (EPC) with a presence across various sectors including power transmission and distribution, railways, civil, urban infrastructure, solar, oil & gas pipelines, and cables.  The company has recently announced fundraising plans of around Rs.6000 Cr.

Fundraising Plans 

In a move to further boost its growth, KEC International has announced plans to raise up to Rs.6,000 crore through a combination of qualified institutional placement (QIP) and the issuance of non-convertible debentures (NCDs). The company aims to raise Rs.4,500 crore via QIP by issuing equity or equity-linked instruments, and an additional Rs.1,500 crore through NCDs via private placement.

This initiative is subject to the overall borrowing limits approved by its shareholders. To manage this process, the company has established a dedicated committee. Additionally, KEC International plans to streamline its operations by transferring its cables business to a newly created subsidiary.

Expanding Project Portfolio

KEC International recently secured new orders valued at Rs.1,422 crore for various transmission and distribution projects in India and the United States. This includes high-voltage transmission line contracts and substation structures, pushing the company’s total order intake for the year past Rs.7,500 crore—an impressive 70% increase from FY24.

Profitability Metrics 

KEC International’s shares have surged over 2% following its robust Q1FY25 results. For the quarter ending June, the company reported a net profit of Rs.87.6 crore, more than doubling from Rs.42 crore last year. Revenue grew 6.3% year-on-year to Rs.4,512 crore. Operating income (EBITDA) increased by 10.6% to Rs.270 crore, with a stable EBITDA margin of 6%. The shares are trading at Rs.889.30, reflecting a 46% year-to-date gain, significantly outperforming the Nifty’s 14% rise.

Conclusion: KEC International’s Q1FY25 results highlight a  strong financial position, along with a 46% year-to-date stock gain, outperforming the Nifty’s 14%rise. The company’s plan to raise Rs.6,000 crore through a combination of QIP and NCDs is poised to support its expansion and streamline operations, reflecting its growth trajectory and focus on boosting infrastructure.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.