HFCL launches QIP at a floor price of Rs 68.61 per share, stock jumps 2%

Shares of HFCL jumped nearly 2 percent in early trade on August 29 after the company launched a qualified institutional placement (QIP) for raising funds.

At 10:15am, the HFCL stock was trading 1.82 percent higher at Rs 72.75 on the NSE.

Details of the Qualified Institutional Placement

In a strategic move to bolster its financial resources, HFCL has announced the launch of a qualified institutional placement (QIP) issue. According to a filing with the BSE, the decision was taken by the fund-raising committee of directors on August 28.

The floor price for the QIP issue has been fixed at Rs 68.61 per share, providing potential investors with a clear entry point. By tapping into the QIP route, the company aims to secure the necessary capital to fuel its ongoing projects, research and development initiatives, and potential expansion into new markets.

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What is a Qualified Institutional Placement?

A Qualified Institutional Placement is a well-established route for companies to raise funds from institutional investors. It provides a streamlined and efficient mechanism for capital infusion while minimising market impact.

Recent developments in HFCL

Reliance Industries-backed Himachal Futuristic Communications Limited (HFCL) recently recorded a 42 percent rise in its net profit at Rs 75.56 crore in the April-June quarter of FY2023-24, up from Rs 53 crore in the year-ago period, according to a BSE filing. Its revenue declined 5 percent to Rs 995 crore from Rs 1,051 crore in the last fiscal around the same period, according to the filing.

The company’s net profit dropped 4 percent sequentially from Rs 79 crore in the March quarter, while its revenue took a 31 percent plunge from the previous quarter. The company had recorded revenue of Rs 1,432 crore in Q4FY23.

“During Q1FY24, we have significantly increased revenues from international business to Rs 176.23 crore witnessing a growth of 156 percent on an on-year basis,” Mahendra Nahata, Managing Director of HFCL, said. “HFCL’s strategy to focus on increased revenue from products, expand its capacities and tap into new geographies has resulted in an increase in the product revenue share to 67 percent in Q1FY24 as against 59 percent in the same quarter last year.”

The company has signed a two-year deal with Bharat Electronic Limited, India’s largest defence PSU for defence, telecom and railway sectors, he said.

Stock Performance

The HFCL stock has given a return of 11.12 percent over the last six months. The benchmark Nifty50 index has also given a similar return of 12.01 percent over the same duration.

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