ITI FPO begins; shares fall about 9% in two sessions

ITI fell 2.21% to Rs 90.90 after the launch of its follow-on public offer (FPO) today, 24 January 2020.

The FPO will close on 28 January 2020. The FPO comprises a fresh issue of 18 crore equity shares and additional issue of 18 lakh equity shares in the price band of Rs 72 to Rs 77.

The proceeds, expected to be in the range of Rs 1,308 crore to Rs 1,399 crore, would be utilised towards working capital requirements, repayment of loan taken by the company and for general corporate purposes.

The FPO will help the company meet Sebi's requirement of minimum 25% public shareholding.

The FPO received bids for 9,57,600 shares, as against 18.18 crore shares on offer, as per the National Stock Exchange of India (NSE) website data at 12:00 IST.

Shares of ITI tumbled 8.91% in two sessions from its recent closing high of Rs 99.80 registered on 22 January 2020.

ITI's consolidated net profit surged 1139% to Rs 168.25 crore on 47% jump in net sales to Rs 827.95 crore in Q3 December 2019 over Q3 December 2018.

The bump in the net profit was aided by 107.9% rise in other income to Rs 150.87 crore in Q3 December 2019 as against Rs 72.57 crore in Q3 December 2018. The Dept of Telecommunications (DoT), GOI allocated a grant of Rs 85.40 crore to the company towards meeting the liability of PF of the employees. It has also written back liablities to the tune of Rs 49.30 crore, which in the opinion of the company is no longer required.

ITI manufactures telecommunications products, including electronic switching equipment, telephones and related devices, digital radio, open wire bags, optical fiber equipment and digital exchanges. The company's customers include defense, railways and oil companies.

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