Sobha shares soar 17% to hit one-year high on proposal to raise fund via rights issue

Shares of Sobha Ltd rose sharply in Thursday's trade to scale their one-year high level. The stock surged 17.08 per cent to hit 52-week high price of Rs 1,552.30. At this price, the multibagger scrip has rallied 276.41 per cent from its one-year low of Rs 412.40, a level seen on March 29 last year.

Today's sharp jump in the share price came after the company, in a BSE filing, stated that a board meeting is scheduled to be held January 22 to consider the proposal of fund raising by way of equity shares through rights issue.

"Sobha's pre-sales (by value) set a new record for the seventh consecutive quarter in Q3 FY24. Its total pre-sales came in at Rs 1,950 crore (up 37 per cent YoY/13 per cent QoQ). The company's share in bookings was Rs 1,740 crore (up 56 per cent YoY/36 per cent QoQ) on the back of higher realisation of Rs 11,732/sft (up 22 per cent YoY/15 per cent QoQ)," Nuvama Institutional Equities said earlier this month.

We expect the sales momentum to remain healthy, the domestic brokerage mentioned. Nuvama maintained its 'Buy' on the counter with a target price of Rs 1,577.

"The company registered its highest-ever pre-sales in Bengaluru, both in terms of volumes and value, selling 1.25msf (75 per cent share in overall bookings) led by launch of the Neopolis project, which contributed 54 per cent to overall sales by value. Bookings also surged 59 per cent YoY in the Kerala region. The company completely sold off Sobha city in Gurugram during the quarter. Projects in the GIFT City are also witnessing higher traction," the brokerage further said.

Nuvama underscored that a revival in housing demand coupled with Sobha's focus on cash flows should hold it in good stead. The company is ramping up its business development plans that will be met from internal accruals itself with debt directionally trending downwards, it added.

Bourses BSE and NSE have put the securities of Sobha under the long-term ASM (Additional Surveillance Measure) framework. Exchanges put stocks in short-term or long-term ASM frameworks to caution investors about high volatility in share prices.

The counter was trading higher than the 5-day, 10-, 20-, 30-, 50-, 100-, 150-day and 200-day simple moving averages (SMAs). The 14-day relative strength index (RSI) came at 78.70. A level below 30 is defined as oversold while a value above 70 is considered overbought.

The company's stock has a price-to-equity (P/E) ratio of 121.61 against a price-to-book (P/B) value of 5.39.

As of December 2023, promoters held 52.28 per cent stake in the company.

(Disclaimer: Business Today provides stock market news for informational purposes only and that should not be construed as investment advice. Readers are encouraged to consult a qualified financial advisor before making any investment decisions.)

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