Suzlon Energy is in a state of flux today. First, reacting to the news of the demise of the company’s founder, CEO, Tulsi Tanti, the stock price opened 7% lower at Rs.7.46 but soon rose to Rs.8.24, up 3% and is currently just about holding on to the green.
The stock price initially reacted the news of the death of Mr.Tanti but with announcement coming of the rights issue going ahead as planned, the stock price recovered. The company announced that the Promoters and the Promoter Group have re-confirmed their participation in the proposed rights issue and have expressed their intention to subscribe to the full extent of their rights entitlement.
The stock is trading ex-rights from today – the rights issue opens on 11th Oct and closes on 20th Oct and the Record date is tomorrow, 4th Oct.
The company plans to raise Rs.1200 crore by issuing 240 crore partly paid-up equity shares for cash at a price of Rs 5 per rights equity share to its eligible shareholders in the ratio of 5:21. The proceeds are to be used to retire some of its debt, which has come down from Rs.17,000 crore in FY15 to Rs.2774 crore in Q1FY23.
Its unbelievable at the value destruction which has happened to the stock price – from an IPO price of Rs.510 in 2005, it is today a penny stock, quoted at less than Rs.10.