Transformers and Rectifiers shares locked at 5% upper circuit, know the reason in details

Shares of Transformers and Rectifiers (India) surged, hitting the upper circuit limit of five percent on June 11. This spike followed the company’s launch of a qualified institutional placement (QIP).

The company set a floor price of ₹699.95 per share for the issue, which is 4.5 percent lower than the closing price on June 10. Although the total amount to be raised has not been disclosed, sources informed CNBC-TV18 that the company is expected to raise ₹500 crore through the QIP.

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As of 12:23 PM, the shares were trading at ₹770.45, marking a 5% increase. Sources suggest that the share sale might lead to a 5.2 percent equity dilution, indicating an issue price around ₹665, which represents a 9.38 percent discount.

The proceeds from the QIP will be used for capital expenditure plans, debt repayment, working capital needs, and general corporate purposes. Additionally, the selling shareholder will be subject to a 60-day lock-in period before they can sell more shares.

Nuvama Wealth Management, formerly known as Edelweiss Securities, is the book-running manager for this QIP.

In a strong show of demand, the issue was subscribed 2.5 times by the second day, with the retail portion being oversubscribed 7.56 times.