Shares of chemicals firm PCBL shoot up 5% on warrant issue worth Rs 488 cr

Shares of chemical manufacturing firm PCBL rose up to 5 per cent on the Indian bourses in Thursday’s intraday deals. Phillips Carbon Black Limited's stock was trading 4.73 per cent higher at Rs 277 in early trade. 

This comes after the company informed the exchanges on Wednesday that its board on March 27, 2024 approved issuance of up to 1 lakh 60 thousand warrants of the company at a price of Rs. 280 per warrant. The warrants bought by Rainbow Investments Limited, Quest Capital Markets Limited and Stel Holdings Limited on preferential basis amount to Rs. 448 crores. 

“The warrant sale is subject to statutory and regulatory approvals, appropriate sanctions and permissions including approval of the members' of the company,” PCBL said in a filing. 

Stock warrants are financial instruments that give the holder the right to buy a specific number of shares of a company's stock at a predetermined price within a specified time frame. Warrants can provide potential benefits to investors if the price of the underlying stock rises above the exercise price, allowing them to buy the stock at a discount.

In the quarter ending December 2023, PCBL reported a net profit of Rs 147.98 crore, representing a 52 percent increase compared to the corresponding period last year.

During the same period, consolidated revenue from operations surged by 21 percent year-on-year to Rs 1,656.76 crore.

PCBL's revenue from black carbon witnessed a 21 percent year-on-year growth, reaching Rs 1614.96 crore in Q3FY24. Additionally, revenue from the power segment experienced a 32 percent year-on-year rise, amounting to Rs 49.59 crore in the October-to-December quarter.

On the BSE, the company’s stock had hit a 52 week high of Rs 343.25 on 08 February 2024. PCBL share has rallied 7.41 per cent year to date and by 63 per cent in the last six months. It is currently trading at price to equity multiple of 21 times, shows data. 

PCBL is one of the biggest carbon black manufacturer in India and a strong global player with a significant customer base in 50 countries.