Shares of VA Tech Wabag declined over 5 per cent in Wednesday’s early trade after the board on Tuesday approved issuance of up to 75 lakh shares on a preferential basis at Rs 160 per share, which is a 30 per cent discount to Tuesday’s closing price of Rs 227.30.
The scrip traded 5.41 per cent down at Rs 215 at around 9.30 am (IST), while the benchmark BSE Sensex was up 0.22 per cent at 38,927.
The water treatment player said its board of directors has considered the Letters of Consent received from “marquee, high networth investors” and approved capital infusion aggregating to Rs 120 crore.
“…is pleased to announce that its Board of Directors has considered the Letters of Consent received from the marquee, high networth investors and approved the infusion of equity capital into the company,” VA Tech Wabag said in a release.
The issue of equity shares on preferential basis to the proposed investors are subject to approval at the annual general meeting scheduled to be held on September 23, the company said.
“We would like to extend a warm welcome to all the potential incoming investors, each of whom enjoy a high level of respect and credibility in the financial markets ecosystem. This is the first time, the company has proposed to raise equity capital since its IPO in 2010,” company MD Rajiv Mittal said.
“…we believe this well timed equity infusion will provide the necessary growth capital for the company to scale greater heights,” he said.