Azad Engineering Share Price Rallies 5% After Company Raises ₹700 Crore via QIP; Do you own?
Market Buzz: Azad Engineering’s QIP Soars 5% After Successful Fundraising
Azad Engineering share price rallied 5% on Tuesday’s trading session after the company raised ₹700 crore via a qualified institutional placement (QIP) by issuing 54.68 lakh shares at ₹1,280 each, reflecting a 1.77% discount to the floor price of ₹1,303.08.
What’s behind the surge?
The company’s board had approved a proposal to raise funds by issuing equity shares for a total amount of up to ₹1,000 crore, with or without a greenshoe option. The QIP opened for bidding on February 25, and the placement document has been adopted, with the board finalizing the allocation confirmation note for eligible qualified institutional buyers.
So, what’s next for Azad Engineering?
Azad Engineering QIP Details
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- Total fund raise: ₹700 crore
- Number of shares issued: 54.68 lakh
- Floor price: ₹1,303.08
- Discount to floor price: 1.77%
But, what about the company’s performance?
In the December quarter of FY25, Azad Engineering reported an operating revenue of ₹120.48 crore, a significant increase from ₹89.22 crore in the same period last year. Net profit for the quarter stood at ₹23.72 crore, up from ₹16.80 crore in Q3FY24.
Performance Highlights
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- Operating revenue (Dec QFY25): ₹120.48 crore
- Operating revenue (Dec QFY24): ₹89.22 crore
- Net profit (Dec QFY25): ₹23.72 crore
- Net profit (Dec QFY24): ₹16.80 crore
Should you buy or sell?
Brokerage firm Choice Broking has maintained its ‘buy’ rating on Azad Engineering stock and has revised the target price to ₹2,150, seeking a 46% upside. The firm expects Azad Engineering to register a healthy revenue/EBIDTA/PAT growth of 43/47/58% CAGR over FY24-27E.
Expert View:
The company’s funds raised through the QIP will likely be used to fuel its growth strategy, including strengthening its balance sheet and increasing its capacity to bid for more contracts. As the share price rallied 5% on the back of this successful fundraising, investors may want to consider adding Azad Engineering to their portfolio for long-term gains.
Conclusion:
Azad Engineering’s QIP has received a positive response, and the company’s strong financial performance has raised hopes for its growth prospects. With a buy rating and a target price of ₹2,150, Azad Engineering could be an attractive pick for investors looking to ride the wave of growth.
Disclaimer: This article is for informational purposes only and should not be considered as personalized investment advice. Please do your own research and consult with a financial advisor before making any investment decisions.
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