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Harsha Engineers premium listing on BSE, NSE: Shares end 47% up from IPO price even as Sensex, Nifty fall 2%

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Harsha Engineers shares listed on the stock exchanges today at a premium to the IPO price amid weak market momentum. Shares of the company began trading on the NSE at Rs 450 per share, up 36% from the IPO price of Rs 314-330 apiece per share and on the BSE the stock debuted at Rs 444 apiece, rising 35 per cent. At the time of listing, the company had a market capitalisation of Rs 4,042.36 crore. At close Harsha Engineers share price ended 47 per cent higher at Rs 486 apiece on Monday. The company launched its Rs 755-crore initial public offering (IPO) from September 14-16 and received strong demand across investor categories. The IPO was subscribed 74.7 times. The Harsha Engineers International IPO comprised a fresh issue of Rs 455 crore and an offer for sale (OFS) of up to Rs 300 crore by shareholders and promoters. 

Also read: Rupee likely to depreciate on strong dollar, bond yields; USDINR to trade with positive bias in this range

Analysts at Mehta Equities said that despite uncertainty in the equity markets, Harsha Engineers was signalling a strong debut with a significant premium over its issue price of Rs 330 per share. “Considering the excellent response from the investor category, we assume that Harsha Engineers could list around Rs 480-500 levels, which translates to more than 45-51 per cent premium over the upper end of the IPO price band,” Prashanth Tapse, Research Analyst — Senior VP Research, Mehta Equities, said. He also added that high premium listing would be justified on the back of a virtual monopolistic business model in its product segment which generated a stronger than expected investor demand with the QIB portion getting subscribed over 178x times.

Also read: Harsha Engineers, Britannia, Embassy REIT, Coal India, BPCL, State Bank of India stocks in focus

Tapse said that on valuation per se the ask price is fairly valued when compared to its industry peers. Analysts seem to be optimistic on Harsha Engineers with its dominant position and well placed to tap the growth in specialized precision components and bearing cage demand across all the industries. “We advise that allotted investors should look at booking profits for such healthy listings in the current market scenario, while risk takers can hold for a long-term perspective and if investors wish to add Harsha Engineers on listing day, it is better to wait and watch before taking any aggressive approach,” Tapse advised.

Govt to release extra Rs 20K-cr to oil retailers as LPG subsidy

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The Centre will likely provide an additional amount of around Rs 20,000 crore – over Rs 5,800 crore budgeted – to the state-run fuel retailers to compensate them for the under-recoveries on cooking gas in the current financial year, according to a senior finance ministry official. This means that subsidy on fuels, which was brought down to just Rs 241 crore in FY22, will rise significantly in the current year.

“The government recognises the fact that oil companies need some compensation. A final decision on the precise amount of compensation will be taken on how prices of Indian crude oil basket move,” the official told FE.

Also Read: Fresh review of gas pricing formula starts

Even though no LPG subsidy has been transferred to the bank accounts of households since June 2020, an incomplete pass-through of costs to consumers has inflated the state-run oil marketing companies’ under-recoveries on this front. Also, the re-introduction of LPG subsidy under the Ujjwala Yojana –under which upto 12 LPG cylinders a year are given to 90 million people at the rate of Rs 200/cylinder — in May 2022 is seen to cost Rs 6,100 crore in FY23.

The three state-run retailers – IOC, BPCL and HPCL – which supply over 90% of domestic fuel supplies have suffered the worst quarterly under-recoveries in retail fuel sales in years in Q1FY23 by absorbing record international crude prices.

Nomura had estimated OMCs’ under-recoveries on LPG in Q1FY23 alone at Rs 9,000 crore. According to it, in H2 last year, the under-recoveries were to the tune of Rs 6,500-7,500 crore.

Also Read: LPG subsidy may be back in FY23

“Despite posting record gross refining margins ($17-32/bbl), in line with record Singapore benchmarks in Q1, overall earnings for the three OMCs have declined sharply in Q1, thanks to record high fuel retail losses of Rs 10-12/litre for petrol and diesel in the quarter,” according to ICICI Securities.

“OMCs not passing on the increase in crude oil costs to customers resulted in weak marketing margins. Crude oil prices were trading at elevated levels but prices of petrol and diesel at retail outlets were steady. Correction in crude oil prices may improve marketing profitability of these companies,” ICICI Direct in a report on September 10.

In the FY23 Budget, the Centre made a provision of Rs 5,800 crore for LPG subsidies, including a direct benefit transfer of Rs 4,000 crore for domestic use and another Rs 800 crore for the poor under the Ujjwala scheme.

Budgetary LPG subsidy came down from Rs 24,172 crore in FY20 to Rs 11,896 crore in FY21. The subsidy was just Rs 241 crore in FY22. Given that other fuels, including petrol and diesel, are decontrolled, the Centre’s Budget was almost completely freed from the burden of fuel subsidy in FY22, marking an end to a sticky and politically-sensitive item of revenue expenditure it struggled long to get rid of.

Since June 2020, the subsidies on domestic LPG have been limited to small amounts of freight subsidies for far-flung regions. The higher fuel subsidies may put further stress on the government finances already under pressure due to about Rs 2 trillion additional subsidies announced for FY23, mainly for food and fertiliser. It had also cut excise duty cut on petrol and diesel which will likely result in about Rs 85,000 crore revenue loss.

Wall Street stocks slump as investors absorb 75 bps rate hike, hawkish Fed message

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Wall Street’s main indexes see-sawed before slumping in the final 30 minutes of trading to end Wednesday lower, as investors digested another supersized Federal Reserve hike and its commitment to keep up increases into 2023 to fight inflation. All three benchmarks finished more than 1.7% down, with the Dow posting its lowest close since June 17, with the Nasdaq and S&P 500, respectively, at their lowest point since July 1, and June 30. At the end of its two-day meeting, the Fed lifted its policy rate by 75 basis points for the third time to a 3.00-3.25% range. Most market participants had expected such an increase, with only a 21% chance of a 100 bps rate hike seen prior to the announcement.

Also Read: Wipro, Tech Mahindra, Punjab National Bank, IDBI Bank, Century Ply stocks in focus on weekly F&O expiry

“Chairman Powell delivered a sobering message. He stated that no one knows if there will be a recession or how severe, and that achieving a soft landing was always difficult,” said Yung-Yu Ma, chief investment strategist at BMO Wealth Management. Higher rates and the battle against inflation was also feeding through into the U.S. economy, with the Fed’s projections showing year-end growth of just 0.2% this year, rising to 1.2% in 2023. “Markets were already braced for some hawkishness, based on inflation reports and recent governor comments,” said BMO’s Ma. “But it’s always interesting to see how the market reacts to the messaging. Hawkishness was to be expected, but while some in the market take comfort from that, others take the position to sell.

Also Read: Sensex, Nifty snap 2-day gaining streak ahead of US Fed outcome; here’s how to trade on F&O expiry day

The Dow Jones Industrial Average fell 522.45 points, or 1.7%, to 30,183.78, the S&P 500 lost 66 points, or 1.71%, to 3,789.93 and the Nasdaq Composite dropped 204.86 points, or 1.79%, to 11,220.19. All 11 S&P sectors finished lower, led by declines of more than 2.3% by Consumer Discretionary and Communication Services. Volume on U.S. exchanges was 11.03 billion shares, compared with the 10.79 billion average for the full session over the last 20 trading days. The S&P 500 posted two new 52-week highs and 70 new lows; the Nasdaq Composite recorded 44 new highs and 446 new lows.

Will bulls manage to push Nifty past 18000 amid uncertainty? 5 things to know before market opening bell

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Domestic equity market is expected to open on a positive note as trends in the SGX Nifty indicated a firm opening for NSE Nifty 50, BSE Sensex, with a gain of 131.50 pts. “While the undertone of the market remained volatile, a strong relief rally after the recent slump helped benchmark indices to rebound on Monday. While European markets and most of the Asian pack continued their downward spiral, the underperformance of the Indian markets last week prompted investors to buy the beaten-down stocks. Despite the recovery, markets may gyrate sharply intra-day amid global uncertainty,” said Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities.

Also Read: Share Market LIVE: SGX Nifty hints at positive start for Nifty, Sensex; global cues strong, US Fed meet eyed

Nifty technical view: A small positive candle was formed on the daily chart with minor lower shadow. Technically, this pattern indicates minor upside bounce in the market. The Nifty is currently placed within a broader range of 18000-17500 levels and it was seen showing minor upside bounce from the lower range. Hence, any sustainable upside bounce from here could encounter hurdles around 17750, 17860 and 18050 levels. The short term trend of Nifty continues to be negative. Monday’s upside bounce could be a cheering factor for the bulls to make a comeback. Further sustainable upmove from here could pull Nifty towards 18K mark again, according to Nagaraj Shetti, Technical Research Analyst, HDFC Securities.

Levels to watch for: Nifty managed to close above the upward sloping trend line adjoining the daily lows of 20 June and 1 July 2022. Resistance for the Nifty are seen at 17760 and 17826, which happens to be 50% and 61.8% retracement of the entire fall seen from 18088 (recent swing high made on 13 Sep 2022) and Monday’s low of 17429. Below 17429, Nifty is expected to enter short term down trend. On the higher side, 18100 seems to be have become ceiling for the short term,” said Devarsh Vakil, Deputy Head of Retail Research, HDFC Securities.

FII and DII data: Foreign institutional investors (FIIs) net bought shares worth Rs 312.31 crore, whereas domestic institutional investors (DIIs) net offloaded shares worth Rs 94.68 crore on Monday, according to the provisional data available on the NSE.

Also Read: Adani Group, Dish TV, Natco Pharma, Bombay Dyeing, CEAT stocks in focus on 20 September

Stocks under F&O ban on NSE: Delta Corp, Escorts, Indiabulls Housing Finance, India Cements, PVR, and RBL Bank are the six stocks in the NSE F&O ban list for September 20. Securities thus banned under the F&O segment include companies where derivative contracts have crossed 95% of the market-wide position limit.

Patanjali eyes 5 IPOs in 5 years

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Patanjali, the FMCG brand started by Baba Ramdev, will announce its initial public offering (IPO) plans for five group companies on Friday at a press conference. The IPO plan includes Patanjali Ayurved, Patanjali Wellness and Patanjali Medicine and Patanjali Lifestyle, according to some news reports. The company said the move is to scale new heights of corporate performance.

In 2016, according to CLSA and HSBC, Patanjali was one of the fastest-growing FMCG companies in India. It was valued at `3,000 crore. India Infoline (IIFL) had also said that at least 13 listed companies, including Hindustan Unilever, Colgate, Dabur, ITC and Godrej Consumer Products, will be affected by Patanjali’s success.

Also Read: KEC International order book robust, net working capital to improve

In 2019, Patanjali Ayurveda bought Ruchi Soya for Rs 4,350 crore under the IBC process and named it Patanjali Foods, which is already listed on the stock exchange. Ruchi Soya sells its products under brands like Ruchi Gold, Mahakosh, Sunrich, Nutrela, Ruchi Star and Ruchi Sunlight, which compete with brands from Adani Wilmar and Emami Agrotech in the edible oil space. It is also into oil palm plantations and renewable wind energy business.

Diversifying from the edible oil business and expanding its presence into FMCG, Patanjali Foods acquired biscuits, cookies and rusk businesses in May 2021, and breakfast cereals and noodles business in June 2021 from Patanjali Ayurved. It also launched nutraceutical products in June 2021. Further, during April-June, the company also acquired PAL’s food business, which has over 500 SKUs across eight product categories, including ghee, honey, spices, juices and atta.

According to analysts, this move will reposition Patanjali Foods from a largely commodity-based company to a leading FMCG and FMHG company in India. The company’s strategy to leverage the Patanjali brand and enhance synergies with PAL will further boost the growth, said a recent report from a domestic brokerage. The company is also a market leader in the branded TSP (textured soya protein) space, under Nutrela brand.

“Going ahead, we expect the company to achieve a 22% CAGR growth in its revenues, largely driven by the food business, which is expected to grow nearly 4x on the account of the recent acquisition and scaling up of the same. This shall increase the contribution of the food business to about 20% in FY24 from 14% in FY22. Oils business is expected to grow by 14% CAGR over FY22-24E with higher realisations. The volume growth is expected to be in mid-single digits and better than industry growth as it piggybacks on Patanjali’s vast distribution network,” said the brokerage.

With manufacturing units and headquarters in the industrial area of Haridwar, Patanjali Food and Herbal Park is its main production facility. In 2020, the production capacity of the facility was pegged at Rs 35,000 crore and it had plans of expanding it to a capacity of Rs 60,000 crore through new production units in Noida, Nagpur and Indore.

For the full-year ended March 30, 2022, Patanjali’s revenue rose nearly 9% to Rs 10,664.46 crore against Rs 9,811 crore a year ago. However, net profit was marginally lower by 0.6% to Rs 740.38 crore against Rs 745.03 crore in FY21. The FMCG business revenue climbed to Rs 9,241 crore in FY22 against Rs 8,778 crore in FY21. The ayurvedic products business rose to Rs 1,274 crore versus Rs 925 crore in FY21.

US Stocks: Wall Street ends higher, gains driven by banks, healthcare

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Wall Street‘s main indexes posted gains on Thursday mainly lifted by financial institutions and healthcare companies, as investors digested hawkish remarks from policymakers that cemented bets of a large interest rate hike later this month. Indexes bounced back and forth in a choppy trading as concerns over Federal Reserve’s next steps to tame a surging inflation remain.

“There’s just a lot of uncertainty and I think people aren’t going to really make up their minds for longer than five minutes or five seconds, you know, until there’s a little bit more clarity or light at the end of the tunnel,” said Grace Lee, an equity income senior portfolio manager at Boston-based Columbia Threadneedle Investments.

Also read| IndiGo, Vodafone Idea, Jet Airways, Future Lifestyle, Adani Group stocks in focus on September 9, 2022

Federal Reserve Chair Jerome Powell said the central bank is “strongly committed” to bringing inflation down and needs to keep going until it gets the job done.

Chicago Fed President Charles Evans joined his fellow policymakers in saying that reining in inflation is “job one. “Investors are also awaiting the U.S. August inflation report next week for fresh clues on whether the Federal Reserve will hike rates by half or three-quarters of a percentage point at the next policy meeting due Sept. 20-21.

Also read| Share Market LIVE: Nifty, Sensex stare at positive start; ECB raises rates by an unprecedented 75 bps

Worries over aggressive monetary tightening across the globe stalled equity markets on Thursday after the European Central Bank hiked interest rates by an unprecedented 75 basis points and signaled further hikes. Meanwhile, data showed the number of Americans filing new claims for unemployment benefits fell last week to a three-month low, underscoring the robustness of the labor market even as the Fed raises interest rates.

With increasing odds of another outsized rate hike, both the rate-sensitive S&P 500 bank index and the S&P 500 healthcare sector rose 2.8% and 1.8%, respectively. The healthcare sector was boosted by news that Regeneron Pharmaceuticals Inc’s anti-blindness treatment Eylea was shown to work as well when given at a higher dose at a longer interval between injections. The drugmaker’s shares jumped 18.8%.

“People are embracing safety. Healthcare is a very safe sector and it’s still fairly cheap, the same way with the broader financial sector,” said Lee.The Dow Jones Industrial Average rose 193.24 points, or 0.61%, to 31,774.52, the S&P 500 gained 26.31 points, or 0.66%, to 4,006.18 and the Nasdaq Composite added 70.23 points, or 0.6%, to 11,862.13.

GameStop Corp surged 7.4% after the video game retailer reported a smaller-than-expected quarterly loss.American Eagle Outfitters Inc tumbled 8.7% after the apparel maker missed second-quarter profit estimates and said it would pause quarterly dividend as it fortifies its finances against a hit from inflation.Volume on U.S. exchanges was 10.19 billion shares, compared with the 10.37 billion average for the full session over the last 20 trading days.

On Wednesday, Wall Street’s main indexes climbed the most in about a month as bond yields retreated after a recent surge that was driven by expectations of higher interest rates. Still, the benchmark S&P 500 is down over 16% year-to-date. Advancing issues outnumbered declining ones on the NYSE by a 1.34-to-1 ratio; on Nasdaq, a 1.48-to-1 ratio favored advancers. The S&P 500 posted 7 new 52-week highs and 8 new lows; the Nasdaq Composite recorded 37 new highs and 153 new lows.

Sensex, Nifty fall for 6th day straight ahead of monthly F&O expiry; Rupee at new low, Nifty support at 16800

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BSE Sensex and NSE Nifty 50 settled in red for the 6th straight day on Wednesday, one day ahead of weekly and monthly F&O expiry. BSE Sensex plunged 509 points or nearly 1 per cent to 56,598, while NSE Nifty 50 crashed 0.9 per cent or 149 points to settle at 16589. Also, Indian rupee ended at a record closing low of 81.94 per dollar on Wednesday. Index heavyweights such as Reliance Industries Ltd (RIL), HDFC Bank, ITC, Housing Development Finance Corporation (HDFC), Axis Bank, and State Bank of India (SBI), among others contributed the most to the indices’ fall. Broader markets too fell in line with equity frontliners. S&P BSE Midcap index fell 0.5 per cent or 166 points to end at 24438, while S&P BSE SmallCap index lost 0.4 per cent or 120 points to settle at 27871.

Also read: Major headwinds for Indian economy; RBI intervention to curb rupee fall, slowing exports may derail recovery

Investors continue to be sceptical of the domestic market’s higher premium amid the ongoing global deceleration while foreign investors are fleeing emerging economies in search of safer havens. Although the domestic economy is buoyed by solid fundamentals, the stock market’s appetite for risk has been hindered by the rising worries of a worldwide recession. Domestic investors are turning to IT and pharma companies, which have been in a consolidation phase for the past year and are now gaining from the INR depreciation. The RBI policy meeting is currently underway, and the central bank is likely to raise repo rates by 35-50 basis points, however, the inflation outlook may soften in reaction to declining commodity prices.

Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities

Markets remained choppy with a sharply downward bias, as investors exited banking and metal stocks ahead of the monthly F&O expiry with the likely rate hike by the RBI & other central banks indicating that bearish sentiment could continue going ahead. Technically, we are of the view that 17000 would act as an immediate resistance level. Below which, the correction wave is likely to continue till 16700-16650. On the flip side, a short recovery rally is possible only after the dismissal of 17000. Above the same the index could move up to 17100-17200. The Nifty is having major support between 16700-16650 (which is important retracement support level). Buying is advisable in index heavyweight stocks if Nifty falls to 16700 levels.

Also read: Govt further extends deadline for broken rice export in-transit before ban

Mohit Nigam, Head – PMS, Hem Securities

Investors should remain cautious ahead of RBI’s monetary policy meeting later this week. A 50 bps interest rate hike is expected from RBI. On the technical front, immediate support and resistance in Nifty 50 are 16800 and 17200 respectively. Immediate support and resistance in Bank Nifty are 37250 and 38750 respectively.

Ashwin Pal, Senior Technical Analyst, Mandot Securities

We are expecting high uncertainty and very high volatility in the upcoming sessions on the back of weak global cues, fear of recession, and other important upcoming events. Investors and traders are advised to remain calm and patient in intraday trading. On Wednesday, Nifty settled at 16858.60, with major support levels at 16700-16500 and major resistance at 17000-17180. Nifty Bank ended at 37759.85, with major support levels at 37400-37180 and resistance levels at 38000-38300.

The recommendations in this story are by the respective research analysts and brokerage firms. FinancialExpress.com does not bear any responsibility for their investment advice. Capital markets investments are subject to rules and regulations. Please consult your investment advisor before investing.

OPEC+ agrees deep cuts to oil production despite US pressure

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OPEC+ agreed its deepest cuts to oil production since the 2020 COVID pandemic at a Vienna meeting on Wednesday, curbing supply in an already tight market despite pressure from the United States and others to pump more.

The cut could spur a recovery in oil prices that have dropped to about $90 from $120 three months ago on fears of a global economic recession, rising US interest rates and a stronger dollar.

“Higher oil prices, if driven by sizeable production cuts, would likely irritate the Biden Administration ahead of U.S. mid-term elections,” Citi analysts said in a note.

Also Read: Crude oil may fall to Rs 6500/bbl, recession, rate hike talks may weigh on oil prices; adopt sell on

“There could be further political reactions from the U.S., including additional releases of strategic stocks, along with some wildcards including further fostering of a NOPEC bill,” Citi said, referring to a U.S. antitrust bill against OPEC.

JPMorgan also said it expected Washington to put in place counter measures by releasing more oil stocks.

OPEC+ sources said the agreed production cuts of 2 million bpd or 2% of global demand would be made from existing baseline figures.

That means the cuts would be less deep because OPEC+ fell about 3.6 million barrels per day short of its output target in August.

Under-production happened because of Western sanctions on countries such as Russia, Venezuela and Iran and output problems with producers such as Nigeria and Angola.

Also Read: Make the right energy choices

Goldman Sachs analysts said they estimated the real production cuts would therefore amount to 0.4-0.6 million bpd mainly by Gulf OPEC producers such as Saudi Arabia, Iraq, the United Arab Emirates and Kuwait.

Analysts from Jefferies said they estimated the real cuts at 0.9 million bpd.

OIL PRICES RISE

Saudi Arabia and other members of OPEC+ – which groups the Organization of the Petroleum Exporting Countries and other producers including Russia – have said they are seeking to prevent volatility rather than to target a particular oil price.

Benchmark Brent crude traded flat at $92 per barrel on Wednesday, after climbing on Tuesday.

The West has accused Russia of weaponising energy, creating a crisis in Europe that could trigger gas and power rationing this winter.

Moscow, meanwhile, accuses the West of weaponising the dollar and financial systems such as SWIFT in retaliation for Russia sending troops into Ukraine in February.

While Saudi Arabia has not condemned Moscow’s actions in Ukraine, U.S. officials have said part of the reason Washington wants lower oil prices is to deprive Moscow of oil revenue.

Relations have been strained between Saudi Arabia and the administration of Biden, who travelled to Riyadh this year but failed to secure any firm cooperation commitments on energy.

“The decision is technical, not political,” United Arab Emirates Energy Minister Suhail al-Mazroui told reporters ahead of the meeting.

“We will not use it as a political organisation,” he said, adding that concerns about a global recession would be one of the key topics. Russian Deputy Prime Minister Alexander Novak, who was put on the U.S. special designated nationals sanctions list last week, also travelled to Vienna to participate in meetings. Novak is not under EU sanctions.

Buy these two stocks for near term gains while Nifty reverses upside trend

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By Nagaraj Shetti

After showing an upside bounce in the last three sessions, Nifty reversed down sharply on Wednesday and closed the day with a hefty loss of around 265 points. After opening on a negative note, Nifty slipped into weakness in the early part of the session. It later shifted into a range move with an attempt of upside recovery. The sharp intraday weakness triggered in the later part and the Nifty closed near the lows.

Nifty is forming lower highs and lows on the daily chart and is expected to revisit the lower gap support of 14350 in the short term. This could also mean further down move below the crucial weekly 10 period EMA as per weekly chart at 14580 levels. 

Previously, this moving average has offered good support for the market in the subsequent weeks and led to upside bounce in past. Hence, Nifty not finding support of this moving average this time could mean chances of broad-based weakness beginning in the market.

The short term trend of Nifty seems to have reversed down after a small upside bounce. Next lower levels to be watched around 14350-14300 in the next few sessions before showing another round of small upside bounce from the lows. Any pullback rally could find resistance around 14675-14750. 

Buy Sequent Scientific Ltd – (CMP Rs 248.05) 

The downward correction of the last five weeks seems to have completed in the stock price, as per weekly timeframe chart. The stock price has witnessed sharp upside bounce on Tuesday-Wednesday and closed higher. This pattern indicate an attempt of upside breakout after a down trend. This action could be a near term bottom reversal for the stock trend around Rs 215-220 levels. The weekly 10 period EMA is continuously offering support for the stock price and the recent upside bounce has occurred from near this support around Rs 225 levels. The momentum oscillator shows positive indication.

Buying can be initiated in SEQUENT at CMP (Rs 248.05), add more on dips down to Rs 238, wait for the upside target of Rs 272 in the next 3-4 weeks. Place a stoploss of Rs 232.

Buy Balrampur Chini Mills Ltd – (CMP Rs 218) 

The prices of this Sugar stock has been in a sharp uptrend over the last few weeks. The decline of last week seems to have regained in this week, as stock price surged up by 7% as of now. Further upmove from here could result in an upside breakout of the hurdle of Rs 226 levels and that could open more upside for the short term. Weekly 14 period RSI has turned up from near 60 levels, which indicate strength of an upside momentum. Volume has started to expand with upside in the stock price.

Buying can be initiated in Balarmpur Chini at CMP (218), add more on dips down to Rs 210, wait for the upside target of Rs 240 in the next 3-4 weeks. Place a stoploss of Rs 203.

(Nagaraj Shetti is a Technical Research Analyst at HDFC securities. The views expressed are the author’s own. Please consult your financial advisor before investing.)

Veranda to raise Rs 300 cr via preferential issue

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Chennai-based Veranda Learning Solutions (Veranda), a public-listed ed-tech company on Thursday announced that the board of directors has approved a preferential issue to raise Rs 300 crore. This raise includes an investment of Rs 61.40 crore to be subscribed by the promoters in the form of convertible warrants.

The fundraising is through a mix of preferential offers of equity shares and convertible warrants both at Rs 307 per share. Each warrant is convertible into 1 equity share and the conversion can be exercised at any time within 18 months from the date of allotment. Around 25% of the total consideration for convertible warrants will be payable at the time of application.

Also Read: KEC International order book robust, net working capital to improve

Kalpathi S Suresh, chairman and executive director of Veranda Learning Solutions, said, “We are pleased with the response to the private placement and the success of the fundraise places Veranda in a unique position with the necessary war chest to fuel the next leg of growth. At Veranda, our objective is to provide the highest quality education possible at an affordable price. To that end, we are building an eco-system to strengthen our offerings through a judicious mix of high-quality content propelled by cutting edge technology which we believe will take Veranda to greater heights.”

Founded in 2018, by the Kalpathi AGS Group, Veranda Learning Solutions offers a bouquet of training programmes for competitive exam preparation, including state public service commission, banking, insurance, railways, IAS, and CA, as well as a slew of professional skilling and upskilling programmes in trending technologies.

The company provides services through four subsidiaries: Veranda Race, Veranda CA, Veranda IAS, and Edureka – the customer-facing brand of Brain4ce Education Solutions. The company has also incorporated two new subsidiaries: Veranda Learning Solutions North America and Veranda Management Learning Solutions. These new subsidiaries will be used as vehicles for future growth, said a company statement.