Prestige Estates surges 6% on fund raising plan via preferential issue

Shares of Prestige Estates Projects surged 6 per cent to Rs 347 on the BSE on Wednesday, extending its previous day’s 4 per cent gain, after the company announced fund raising plan via preferential issue. In comparison, the S&P BSE Sensex was up 0.23 per cent at 41,446 level at 09:53 am.

"The board of directors of the real estate developer is scheduled to meet on Friday, December 20, 2019 to consider and approve raising of funds through preferential issue to an identified allottee," Prestige Estates said in a regulatory filing on Monday after market hours.

The stock of the real estate developer hit an all-time high of Rs 364 on December 3, 2019 on optimisation of strong pipeline of rental assets yielding growth in rentable income. The company had reported a strong set of numbers for July-September quarter (Q2FY20), with profit before tax (PBT) jumping 50 per cent year-on-year (YoY) to Rs 230 crore. While, revenue grew 48 per cent to Rs 1,923 crore, EBITDA (earnings before interest, tax, depreciation and amortisation) margin expanded by 350 basis points (bps) to 31.7 per cent YoY.

Analysts at Nirmal Bang Equities remains optimistic on Prestige Estates considering its attractive valuation, which is supported by a strong portfolio of operational rental assets, thereby reducing the risks associated with residential segment, and a planned increase in commercial and retail properties over the next five to seven years.