PI Industries hits record high on successful QIP issue; surges 8% in 2 days

Mutual Funds increased stake by more than four percentage points to 21.19 per cent in PI Industries, while FPIs hiked their holdings by nearly two percentage points to 13.82 per cent in June quarter

Shares of PI Industries hit a fresh all-time high of Rs 1,789, up 3.5 per cent in the intra-day trade, on the BSE on Friday. The stock has surged 8 per cent in the past two days after the company successfully raised Rs 2,000 crore via qualified institutional placements (QIP).

The agro-chemical firm on Wednesday said the company has fixed issue price at Rs 1,470 per share, about 4 per cent lower than the floor rate, for sale of shares to institutional investors.

PI Industries has received a strong response from institutional investors for its QIP issue. According to the latest shareholding pattern data filed by the company, mutual funds (MFs) increased their stake by more than four percentage points to 21.19 per cent, while foreign portfolio investors (FPIs) hiked their holdings by nearly two percentage points to 13.82 per cent.

At the end of March 2020 quarter, MFs and FPIs held 17.03 per cent and 12.13 per cent stake, respectively.

The company proposed to utilize the net proceeds to fund the organic or inorganic growth opportunities in the area of its operations and adjacencies, other long-term capital requirements,  investments in subsidiaries, joint venture(s) and affiliate(s) (either through debt or equity or any convertible securities), and pre-payment and / or repayment of outstanding borrowings.

"Despite Covid-19 led challenging environment, the management provided revenue guidance of 20 per cent plus for FY2021E, led by healthy order book, commissioning of additional capacity, and contribution from newly launched brands. With industry-leading return ratios, healthy balance sheet, and strong earnings visibility, we expect the stock to continue to fetch premium valuations," analysts at Sharekhan said.

“The growth momentum, which slackened over FY2016-2018 due to the consolidation in the global crop protection chemicals/agrochem (CPC) business, has made a modest recovery over the last two years. The custom synthesis and manufacturing (CSM) major expects improved growth prospects, supported by a revival in growth initiatives by its global partners and the dedicated capex on multiproduct plants, with capacities booked for 5-7 years. The US$1.5 billion order book gives long-term visibility on PI’s revenue and earnings,” analysts at Nirmal Bang Equities said in stock update.