- 28 Mar 2024
- ICICI Securities
Promoters to infuse equity through warrants route
PCBL - 269 Change: 2.10 (0.79 %)News: PCBL at its Board meeting held yesterday has approved issuance of 1.6 crore warrants of the company at a price of ₹ 280/- per warrant (each convertible into one equity share), aggregating to ₹ 448 crore to the promoter group on preferential basis. Resultantly, promoters’ stake in the company is envisaged to increase from 51.4% to 53.5% (an increase of ~2.1%).
Views: This is a positive development and depicts promoters’ confidence in the business. Given that the company has onboarded debt (~₹ 3,800 crore) on B/S due to recent acquisition of Aquapharm, we believe this capital raise will help retire part of this debt. Since the allotment is at a discount to our target price on PCBL it is marginally negative for the target price calculation (~₹ 3-5/share), however structurally this is a positive development. We have a positive view on the company amidst volume led growth in the base carbon black business, healthy profitability matrix (EBITDA/tonne) and steps taken in speciality domain.
Impact: Positive