Shares of Suzlon Energy Ltd will be in focus on Monday morning after the wind energy firm said its board approved raising funds up to Rs 2,000 crore, which represents nearly 10 per cent of the market capitalisation (m-cap) of the BSE500 firm. Suzlon Energy made the announcement post market hours of Monday and its shares are likely to see some action today.
The stock faces upside resistance at Rs 19-20 levels while the immediate support for the stock stays in the Rs 14-15 levels. The scrip closed at Rs 17.89 on Friday, up 1.36 per cent. The stock is up 66.88 per cent year-to-date.
"The board approved issuance of number of fully paid-up equity shares and/or convertible bonds (CBs), and/or non-convertible debt instruments and/or any other instruments and/or combination of instruments through one or more private offerings or qualified institutions placement and/or any combination thereof, for an aggregate consideration not exceeding Rs 2,000 crore," said Suzlon in a stock exchange filing.
To recall, Suzlon Energy clocked a consolidated net profit of Rs 319.99 crore for the March 2023 quarter led by lower expenses. It posted a consolidated net loss of Rs 205.52 crore in the quarter ended on March 31, 2022. Total income from operations fell to Rs 1,699.96 crore in Q4 from Rs 2,478.73 crore a year ago. Total expenses declined to Rs 1,628.39 crore in the March 2023 quarter from Rs 2,511.70 crore a year ago.
The stock has been in news after ICICI Securities initiated coverage, saying Suzlon Energy is best equipped to benefit from industry tailwinds. The brokerage expects a sharp uptick in Suzlon Energy earnings from FY24Eonwards. The brokerage has recommended a share price target of Rs 22 on the stock, valuing it at 24 times FY25 EPS.
The brokerage said Suzlon Energy is getting back into shape after a ‘rollercoaster’ journey over the last decade due to a slump in industry volumes and high leverage led by the acquisition of Repower in 2008. However, after a series of debt restructuring, net debt has declined sharply from Rs 13,000 crore in FY20 to Rs 1,200 crore as of Mar’23. In addition, the industry is looking at a revival led by a slew of policy actions.
ICICI Securities said the Indian power grid needs more wind in its mix. The need to enhance wind capacity addition (post-subdued activity in the recent past) has finally dawned upon the stakeholders.
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