This S&P BSE Smallcap Stock announced raising of Rs. 253 crore through preferential issue. The company has a market cap of Rs. 4,447 crore and is 4% away from its 52 week high, trading at Rs. 1782.95 versus Rs. 1814.55 at closing on Thursday.
The stock is seeing volumes that are over 0.5x the monthly average, trading 2% and 20% respectively above its 20 day and 200 day moving averages. The company’s shareholding has 20% DII holding and a target from HDFC last month at Rs. 2130, representing an upside of nearly 20% from the current market price.
In a filing dated 5th October 2023, Neogen Chemicals Ltd (‘Neogen”) stated that the board of directors have approved in a meeting held that day, the Issuance of up to 14,42,358 Equity Shares of face value of Rs. 10 each (“Equity Shares”) at a price of Rs. 1754.07 per Equity Share including a premium of Rs. 1744.07 per Equity Share, aggregating up to Rs. 2,52,99,96,897, on a preferential basis.
The company decided to foray into lithium electrolyte in FY21. In earlier preferential issues it was expected that the proceeds were allocated towards this venture.
Neogen foresaw about a year ago, significant opportunities emerging in advance intermediates, custom synthesis and new application for its expertise in lithium chemistry for manufacturing lithium-ion battery materials, required for manufacturing Advance Chemistry Cells for Lithium Ion Batteries having applications for Energy Storage for Renewables as well as for rapidly expanding Electric Vehicle (EV).
Neogen engages in the manufacture and sale of specialty chemicals in India. The objective of a previous fundraise of Rs. 225 crore was to support the company’s growth and to capture the upcoming high potential opportunities in these segments.
The current/ newly announced equity infusion can be expected to further strengthen Neogen’s balance sheet position while making it future ready, to tap the growing needs of key end user industries.
Written by Sandeep R
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