Amber Enterprises rallies 9%, hits record high after launching QIP issue

The company's board has approved QIP issue at a floor price of Rs 1,798.72 per share.

Shares of Amber Enterprises India rallied 9 per cent to hit a record high of Rs 1,997 on the BSE on Tuesday after the company launched a qualified institutional placement (QIP) to raise up to Rs 500 crore for growth capital.

The company's board approved the QIP issue on September 7 at a floor price of Rs 1,798.72 per share. Amber Enterprises is a market leader in Indian room air conditioner (RAC) industry and air conditioning industry for mobile application such as railways, metros, buses etc.

In a draft placement document, Amber said it intends to raise funds for capital expenditure required for the long-term growth of its businesses; extend loans to and invest in its subsidiaries for their long-term and short-term business purposes, repay debt, and make strategic acquisitions or joint ventures.

The consumer electronics maker's stock surpassed its previous high of Rs 1,921, touched on September 4. In the past three months, it has outperformed the market by surging 35 per cent, as compared to 12 per cent rise in the benchmark S&P BSE Sensex.

As the lockdown restrictions were eased off in a phased manner across the country, the company said it witnessed a surge in the retail demand for Air Conditioners in the month of May & June 2020, especially from Tier 2 & Tier 3 cities.

“The pent-up demand from retail led to release of high inventory levels from channel, which in turn led to increase in manufacturing orders by the original equipment manufacturers (OEM’s). We however envisage that the demand scenario has been improving as the lockdown restrictions are eased off and should achieve normalcy in Q3/Q4 FY21,” Amber Enterprises said while announcing Q1 results on August 8.

Various initiatives under consideration by the government under Atmanirbhar Bharat will help boost the local manufacturing. The management believes the component industry eco-system will be created to support domestic manufacturing and reduce dependence on imports.

The China + 1 strategy is firming up, not only in the Indian market but also globally. This has opened up domestic as well as huge export opportunities and the company has already started receiving enquiries for manufacturing of RAC & various components from companies across the globe, it said.

At 11:33 am, Amber Enterprises was trading 6 per cent higher at Rs 1,957 on the BSE, as compared to 0.6 per cent rise in the S&P BSE Sensex. The trading volumes on the counter nearly doubled with a combined 333,000 equity shares changing hands on the NSE and BSE, so far.