The stock bounced back 10 per cent from intra-day’s low of Rs 20.50 on the BSE. A combined 13.3 million equity shares had changed hands on the NSE and BSE till 11:55 am. There were pending buy orders for a combined 1.17 million shares, the exchange data shows.
The proposed investment is in addition to Rs 700 crore approved for investment in the equity shares and share warrants of CG Power by TII.
“The board of directors of the company at the meeting held today (2nd September 2020), approved an additional investment in 68.73 million equity shares of CG Power to be issued to TII at Rs 14.55 per equity share on a preferential issue,” TII said in an exchange filing.
The additional investment into CG power is being proposed in order to meet the additional funding requirements of CG Power and is subject to necessary corporate authorizations and statutory approvals, it said.
The proposed investment is in addition to Rs 700 crore approved for investment in the equity shares and share warrants of CG Power by TII’s board of directors on August 7, 2020.
TII considers that it’s operational, financial and governance capabilities and experience will help remove the present difficulties and hardships of CG Power and facilitate create value creation for both TII and CG Power. Since both the companies are in the engineering business, the acquisition is expected to provide synergy for both the companies.
After subscription to the equity capital including additional investment and conversion of warrants, the shareholding of TII will be 886 million equity shares representing 58.58 per cent (approx.) of expanded issued and subscribed share capital of CG Power, TII said.
Since July 23, 2020, the stock of CG Power has zoomed almost three times or 181 per cent from the level of Rs 8.04 on the BSE. Shares of TII were trading 1 per cent higher at Rs 649 today, rallying 27 per cent during the same period. In comparison, the S&P BSE Sensex was up 2 per cent during the period.