Yesterday, after market hours, VA Tech Wabag announced a preferential issue. It said that 75 lakh equity shares worth Rs.120 crore, were being issued on a preferential basis to marquee investors and high net worth individuals such as Rekha Rakesh Jhunjhnwala and others. Basera Home Finance would also be participating.
This means, the preferential issue is being made at Rs.160/share, which is a huge discount to its close of yesterday of Rs.227.
This is the first time the company has proposed to raise equity capital since its IPO in 2010 and this issue, it feels is well timed equity to provide the necessary growth capital for the company to scale higher.
The stock opened at its intraday high at Rs.235, up almost 3.5% but from there it slipped over 7.5% to Rs.210 and remains firmly in the red currently.