Shares of a company in the power sector soared nearly 20 percent on Friday’s early trades to reach a new record high of ₹ 151.60 apiece on the National Stock Exchange (NSE). This happened amid its plans to raise funds. At 01:54 PM, its shares were trading at ₹ 146.40 apiece.
Transformers and Rectifiers (India) Ltd. is a manufacturer of power, furnace and rectifier transformers. The company informed the exchanges that its board of directors will be meeting on Tuesday, September 12, 2023, to discuss a proposal to raise funds.
The funds will be raised by way of a preferential issue of equity shares or equity-linked securities, securities convertible into equity shares secured, redeemable, non-convertible debentures or other means. The securities will be issued to non-promoter investors through Qualified Institutional Placement (QIP). It did not disclose the amount of funds that it seeks to raise.
Transformers and Rectifiers (India) has been undertaking backward integration and now manufactures majority of the key components in-house to support the quality, timely delivery and to achieve better operational efficiency. It had bagged orders worth ₹ 134 crores in July from a central utility, taking its total order book to Rs 1,955 crore as of date.
The company’s share price increased from ₹ 41.20 to ₹ 151.60 apiece, delivering multibagger returns of 268 percent in a span of one year. Therefore, if an investor had invested ₹ 1 lakh in the company’s shares a year earlier, the value of their holdings would have been ₹ 3.68 lakhs today!
With a market capitalization of ₹ 1,673 crores, Transformers and Rectifiers (India) is a small-cap company. It has a low return on equity of 14.38 percent and an ideal debt-to-equity ratio of 0.84. Its shares were trading at a price-to-earnings ratio (P/E) of 76.95, which is higher than the industry P/E of 69.68, indicating that the stock might be overvalued as compared to its peers. Its promoters hold a 74.91 percent stake in it, followed by retail investors with 25.06 percent and foreign institutions with 0.03 percent
Written by Simran Bafna
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