Rossari Biotech slips 5% after board approves Rs 300 cr preferential issue

Shares of Rossari Biotech slipped 5 per cent to Rs 1,056.80 on the BSE in intra-day trade on Wednesday on profit booking after the company board gave a go-ahead to issue equity shares aggregating to Rs 300 crore on a preferential basis. The company is a speciality chemicals manufacturer, providing intelligent and sustainable solutions for customers across industries. In the past four trading days, the stock has rallied 14 per cent.

The company said its board of directors approved the issuance of up to 3.01 million equity shares on a preferential basis and determined a floor price of Rs 996 per equity share or such a higher price, aggregating to Rs 300 crore. This preferential issue is subject to necessary approvals, including from the company’s shareholders, it said.

The proposed issue will bring onboard high-quality and marquee shareholders of scale and repute. The funds from this issue, if approved, will further strengthen the company’s balance sheet profile and will also augment the financial flexibility to address medium-to-long-term growth prospects.

The proposed investors include SBI Mutual Fund (through various schemes), Malabar Select Fund, Malabar India Fund, India Acorn Fund, Ramesh Siyani and Arpit Khandelwal.

Rossari proposes to utilise the net proceeds to evaluate and invest in inorganic growth opportunities, within its core chemistries, with a view to diversify its product portfolio, expand the geographical reach and augment end-user industry applications. This will further enable the company to build a strong upcoming pipeline of new products, with impetus on sustainability and environment-friendliness, it said.

Axis Capital Limited and Axcelus Finserv are advising the company on this fund raise.