Avenue Supermarts surges 5%, hits new high post Rs 4,000 crore QIP launch
Shares of Avenue Supermarts, which operates supermarket chain DMart, rallied 5 per cent to Rs 2,361, also its new high on the BSE on Thursday, after its board approved the launch of a qualified institutional placement (QIP) by the promoters.
The stock was trading higher for the fourth straight day, thus gaining 14 per cent during the period, against a 4 per cent rise in the S&P BSE Sensex.
Avenue Supermarts on Wednesday informed the stock exchanges that it launched a qualified institutional placement (QIP) by offering 20 million equity shares at Rs 1,999.04 per share.
The company will raise at least Rs 4,000 crore through the issue. The QIP will help promoters of the company, led by Radhakishan Damani, pare their holdings, which currently stands at 79.73 per cent.
Avenue Supermarts proposes to utilise the net proceeds to augment long-term resources for financing its future expansion plans, which include funding expenditure towards implementation of strategy on expanding store network and increasing the efficiency of supply chain network, including warehousing facilities and related acquisition of land, general corporate purposes and other corporate exigencies, including but not limited to, refurbishment and renovation of existing stores, working capital requirements and strategic investments/ acquisitions.
The company also said funds will be used for repaying/ prepaying a part of our outstanding indebtedness.
The operations committee of the board of the directors of the Company is scheduled to meet on Monday, February 10, 2020 to consider and approve the issue price, including a discount, if any, for the equity shares to be issued, pursuant to the QIP Issue.
At 10:04 am, the stock of Avenue Supermarts was trading 4 per cent higher at Rs 2,338 on the BSE, against 0.26 per cent rise in the Sensex. A combined 751,618 shares changed hands on the counter on the NSE and BSE so far.