Transformers and Rectifiers shares up 5% on ₹500 cr QIP launch

Transformers and Rectifiers said that its allotment committee, at its meeting held on June 10, authorised the opening of the issue on Monday at a floor price of ₹699.95 per equity share. The company may, at its discretion, offer a discount of not more than 5% on the floor price for the issue.

The pricing looked attractive for institutional investors as it was at a nearly 4.6% discount on the stock’s previous close of ₹733.80.

On Tuesday, Transformers and Rectifiers shares were locked in the 5% upper circuit at ₹770.45 levels. The stock has delivered over 300% returns in just the past six months, surging more than 9 times in the past year.

The sharp spike in its share price can be attributed to the company’s aggressive capacity expansion plans that will make it India’s largest transformer manufacturer.

To facilitate the capacity expansion, the board of directors of Transformers and Rectifiers, at its meeting held on April 8, 2024, had proposed the QIP that was further approved by the shareholders of the company in the annual general meeting held on May 13.

Transformers and Rectifiers had said that it intended to use the proceeds from the QIP to fund capital expenditure, repay its borrowings, and for the working capital, inorganic growth and general corporate purposes.

Transformers and Rectifiers is a leading transformer manufacturer in India with a manufacturing capacity of 37,200 MVA. The company’s March quarter shareholding data shows that the promoter group entities hold a 69.65% stake in the company.

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