Suven Life Sciences announced yesterday that its Board is scheduled to meet on 24th June to consider raising of funds through a rights issue.
A rights issue is one way to raise capital often to pay down debt or fund future expansion plans. Shareholders can buy new shares at a discount for a certain period. With a rights issue, more floating stock is created, which is why later the stock price gets diluted and adjusts to the increased float.
The company has not mentioned the purpose of the rights issue.
Suven Life Sciences demerged its Contract Research and Manufacturing Services Undertaking (CRAMS) business in 2020 and this demerged company, Suven Pharma, a wholly owned subsidiary, was also listed.
Suven Life now focusses on innovative research focused on Central Nervous System (CNS) disorders.
The stock price of Suven Life is today in the green, rising over 15% to hit an intraday high at Rs.73.45. Its 52-week high is at Rs.124.40 and low at Rs.62.