Fusion Finance shares rose 4% today after the company announced its plans to raise ₹800 crore through a rights issue of partly paid-up shares, with an additional 20% allowance for a preferential issue. The proposal, approved by the board, marks an increase from the earlier approval of ₹550 crore in October.
Stock Details
- As of 9:28 am today: Increased by 3.88%
- 1-Day Performance: +3.88%
- 5-Day Performance: -0.26%
- 1-Month Performance: -11.79%
- 6-Month Performance: -58.63%
- Year-to-Date Performance: -67.91%
- 1-Year Performance: -67.47%
- 5-Year Performance: -47.98%
- All-Time Performance: -47.98%
Fusion Finance aims to utilize the funds raised through the rights issue to address its financial challenges, including breaches of financial covenants related to borrowings of over ₹5,600 crore as of September. The company’s financial struggles have been exacerbated by a higher proportion of bad loans, leading to a credit rating downgrade by CARE Ratings.
The additional capital will provide much-needed liquidity, helping the company secure waivers from lenders and maintain operations amidst significant material uncertainties highlighted by auditors. This strategic move also comes during a tough period for microfinance institutions, dealing with overleveraging and weak performance across the sector.
The promoters have expressed their support for the proposal, committing to ensure its success.
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