Shares of Pepsico bottler Varun Beverages were trading in the red in early deals on Monday even as the firm said its board would consider on October 9 a proposal to raise funds via Qualified Institutions Placement (QIP). Varun Beverages stock fell 3.41% to Rs 559.20 against the previous close of Rs 578.95 on BSE. Market cap of the firm slipped to Rs 1.83 lakh crore. A total of 0.97 lakh shares of the firm changed hands, amounting to a turnover of Rs 5.45 crore.
Varun Beverages shares have delivered multibagger returns of 148% in two years and 366% in three years.
In terms of technicals, the relative strength index (RSI) of Varun Beverages stands at 35.1, signaling the stock is trading neither in the overbought nor in the oversold zone. Varun Beverages shares stand lower than the 5 day, 10 day, 20 day, 30 day, 50 day, 100 day, 150 day and 200 day moving averages.
The firm on October 6 said: "Pursuant to the provisions of Regulation 29(1)(d) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, we wish to inform you that a meeting of the Board of Directors of the Company will be held on Wednesday, 9th October, 2024 inter-alia, to consider and approve the following:
(i) Raising of funds by way of issuance of Equity Shares through Qualified Institutions Placement (“QIP”).
(ii) Notice of Postal Ballot for seeking approval of Equity Shareholders in respect of raising of funds by way of issuance of Equity Shares through QIP."
Global brokerage firm HSBC has initiated coverage on the stock with a 'Buy' call. It has assigned a price target of Rs 780 per share.
Varun Beverages controls 90% of PepsiCo's India bottling volume in a market with low soft drink penetration, compared to a fragmented Coca-Cola system. The firm is the second-largest soft drink bottler in India, holding 28% of the carbonated soft drink (CSD) market share. Coca-Cola’s fragmented bottling system is larger, with a 55% market share, said HSBC.
Varun Beverages is a beverage company. It operates franchisee of PepsiCo. The company produces and distributes a range of carbonated soft drinks (CSDs), as well as a large selection of non-carbonated beverages (NCBs), including packaged drinking water sold under trademarks owned by PepsiCo.