PG Electroplast soars 14% as Rs 500 cr QIP issue opens

The consumer electronics proposed to raise around Rs 500 crore through QIP, fixed the floor price of Rs 1641.09 per equity share for the issue.

Shares of PG Electroplast hit a record high of Rs 2,033.35, soaring 14 per cent on the BSE in Tuesday’s intra-day trade after the company announced opening of the qualified institutional placement (QIP) issue. The consumer electronics proposed to raise around Rs 500 crore through QIP.

The board of PG Electroplast on Monday, August 28, approved the floor price of the QIP, being Rs 1641.09 per equity share. The company further said, a meeting of the board shall be held on Friday, September 01, 2023 to inter alia, consider and determine the issue price of equity shares to be issued pursuant to the QIP, including any discount on the floor price.

At 10:25 AM; PG Electroplast was quoting 9 per cent higher at Rs 1,950.50, as compared to 0.04 per cent rise in the S&P BSE Sensex. Thus far in the month of August, the stock has rallied 35.5 per cent.

The net proceeds of the issue will be utilised for funding the working capital requirements of the company’s subsidiary, PG Technoplast. The funds will also be utilised to funding the capital expenditure requirements of subsidiary, PG Technoplast and for expansion of its manufacturing and warehousing/ storage unit by constructing a new building.

PG Electroplast is a one-stop solution provider for Electronic Manufacturing Services (EMS) and contract manufacturing to most leading consumer durable and electronics brands in India. The company has one of the biggest capacities in Plastic Injection moulding and has capabilities across the value chain in Original Equipment Manufacturing (OEM) and Original Design Manufacturing (ODM) products like Room ACs, Washing Machines, Air-Coolers and LED.

The company’s management sees increased opportunities in existing and new clients and based on the current business environment. With new capacities and capabilities, company is uniquely positioned in the consumer durables & plastics space in India.

In coming years, company aspires to have industry leading growth in revenues, the gradual improvement in margins due to operational efficiencies and operating leverage.

PG Electroplast guided sales of Rs 2,800 crore for the financial year 2023-24 (FY2024) which will be a growth of 30 per cent over FY23 consolidated sales and operating profit guidance of Rs 210 crore which will be a growth of 28 per cent over FY23 operating profit of Rs 164 crore.

The growth in product business i.e., washing machines, room air conditioners and air coolers is expected to be ~43 per cent to Rs 1,920 crore in FY24 from Rs 1,341 crore in FY23.