Sona BLW Fixes Floor Price at Rs 699.01 per Share for Rs.2,400 Crore QIP

Sona BLW Precision Forgings, a leading auto component manufacturer, has announced the floor price for its Qualified Institutions Placement (QIP) at Rs.699.01 per share, aiming to raise up to Rs.2,400 crore. This comes after approvals from the board on July 24, 2024,shareholders on August 30, 2024 and otherwise recently, allowing the company to expand its plans.

QIP Pricing & Equity Dilution

The QIP price range has been set between Rs.675-700 per share, with the option to offer a discount of up to 5%. If the lower end of the price range is chosen, equity dilution is expected to be around 6.06%. The final price will be determined with the help of book-running lead managers, with the QIP officially opening on September 4, 2024.

How the Funds Will Be Used

The funds from this QIP will be used for several key purposes. First, the company plans to repay or fully settle certain outstanding debts. Additionally, part of the funds will help complete the acquisition of Novelic, along with other projects aimed at boosting both existing business growth and working on new opportunities. A portion will also be allocated for purchasing equipment and general corporate purposes.

Financial Performance

Sona BLW has been enjoying a good financial run. In Q1FY25, the company reported a 26.7% rise in net profit to Rs.141.9 crore, up from Rs.112 crore in the same period last year. Revenues grew by 21.8% to Rs.891.2 crore, and EBITDA increased 23.1%, reaching Rs.249.3 crore. The EBITDA margin remained strong at 28%.

Conclusion: In conclusion, with its QIP underway, Sona BLW is now focused on paying down debt and pursuing growth opportunities. Investors seem optimistic about the company’s future, with shares closing 1.63% higher at Rs.722.30 on the day the QIP was launched. 

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.