JTL Industries shares rise as board mulls fundraising

Shares of JTL Industries Ltd rose during the trading session on Wednesday after the company announced its board meeting to consider fund raising plans. The company informed about the same through an exchange filing with a bourse on Wednesday.

A meeting of board of directors of the company will be held on December 18, 2023, inter alia, to consider raising of funds through issuance of equity shares or other securities convertible into equity shares, said the company in the exchange filing.

The company may raise funds in one or more tranches by the way of preferential Issue, qualified institutional placement (QIP), global depository receipts (GDR), American depository receipts (ADR) or through any other permissible mode or any combination thereof, said the filing.

Following the announcement, jtlind-share-price-364096">shares of JTL Industries gained more than 3 per cent to Rs 212.50 on Wednesday, commanding a total market capitalization of more than Rs 3,600 crore. The scrip had previously settled at Rs 205.95 in the previous trading session on Tuesday.

Commenting on near-term outlook for the company, Axis Securities said that stable steel prices to augur well and capacity expansion to 1 mtpa to drive higher EBITDA per tonne. "In the long-term target is to increase capacity to 2mtpa. Mid-term target is to achieve a capacity of 1mtpa by FY25," it said.

The company has stable operating profits and returns during the expansion phase. With the volume expansion Capex going on, the company’s ROE and ROCE are expected to moderate but would remain decent near 20 per cent over FY24-26E. The company has wide distribution reach through strategically located plants, it added with a buy rating a target price of Rs 265 on the stock.

JTL Industries is one of the largest producers of electric resistance welded (ERW) steel pipes in India. Formerly known as JTL Infra, JTL Industries has a capacity to produce more than 6 lakh metric tonnes per annum. It also exports its products to various offshore markets.

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