Venus Pipes & Tubes shares surged 7% to a 52-week high following board approval of a preferential share issue aimed at debt reduction, attracting investments from notable entities and highlighting the company’s growth prospects amidst a sharp market rally.
Venus Pipes & Tubes shares climbed 7% on Thursday to a fresh 52-week high of ₹2,078.10 on the Bombay Stock Exchange after the company’s board approved a preferential share issue to raise about ₹372 crore. The stock was last seen at ₹2,072.05 by 11:12 a.m., even as the Sensex slipped 0.13%, according to Business Standard’s market update.
The company plans to issue about 2.23 million equity shares at ₹1,670 each to a group of investors that includes Ashish Kacholia, Tata Multicap Fund and Kotak Mahindra Life Insurance Company. According to the company’s announcement as reported by Business Standard and TipRanks, the proceeds are intended mainly for repayment or prepayment of borrowings, including any related charges and interest.
ICICI Securities said the issue price represents a discount of roughly 16% to the prevailing market price, which it viewed as mildly negative for sentiment. Even so, the brokerage said participation by well-known investors should support confidence in the company’s growth prospects, while debt reduction could lower interest costs and make the fundraising earnings-accretive, given net debt of ₹257 crore.
The rally has been sharp. Business Standard said the share price has risen about 30% over the past nine trading sessions and has rebounded 134% from its 52-week low of ₹888.45 reached on March 30. The stock had already set a prior high of ₹2,045 on September 15, before surpassing it this week. Venus Pipes, which makes stainless steel pipes and tubes for industrial use, has also pointed to opportunities from demand in oil and gas, power, clean energy, hydrogen and data centres, as well as India’s wider infrastructure build-out.
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