Titagarh Rail Systems shares rise after the launch of Rs 700 crore QIP issue

Titagarh Rail QIP: Titagarh Rail Systems shares rose nearly two per cent on Friday, December 8, after the Kolkata-based railway component manufacturer launched a qualified institutional placement (QIP) to raise up to Rs 700 crore.

Titagarh Rail QIP news: The company has approved the floor price for the issue at Rs 976.1 per share. Image: Freepik/ Representational image

Titagarh Rail share price, Titagarh Rail QIP news: Titagarh Rail Systems shares rose nearly five per cent on Friday, December 8, after the Kolkata-based railway component manufacturer launched a qualified institutional placement (QIP) to raise up to Rs 700 crore. The company has approved the floor price for the issue at Rs 976.1 per share. A QIP is one of the capital raising tool wherein a listed company can issue equity shares, fully and partly convertible debentures, or any security other than warrants that are convertible into equity shares. Only institutions or qualified institutional buyers can participate in a QIP, unlike in an IPO or an FPO.

The stock of the company rose as much as 4.7 per cent to hit the day's high of Rs 1,030 on the NSE. The counter ended Rs 19.15 or 1.95 per cent higher at Rs 1,002.9 on the NSE. The company, in its regulatory filing, said that the QIP Committee shall determine the issue closing date and the price at which equity shares will be issued (the issue price) and allotted at a meeting of the QIP Committee to be held on Tuesday, December 12, 2023, under SEBI regulations.

How is the pricing of QIPs decided?

Market regulator SEBI has formulated a formula to decide the issue price under the QIP route at a price not less than the average of the weekly high and low of the closing prices of the equity shares of the same class quoted on the stock exchanges during the two weeks preceding the relevant date which is the date of the meeting in which the board of the company of the issuer decides to open the proposed issue.

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Titagarh Rail Systems shares in the past one month have gained over 25 per cent. The stock has given multi-bagger returns of over 110 per cent in six months.

Titagarh Rail Systems, as per reports, intends to utilise the proceeds to repay outstanding debt, fund working capital requirements, and for general corporate purposes. Nuvama Wealth Management is the book-running lead manager for the QIP.

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