The share price of Avenue Supermarts, that runs the supermarket Dmart, jumped almost 5% to hit an all-time high of Rs 2,360.75 on Thursday after the company launched a qualified institutional placement (QIP) on Wednesday, offering to raise up to Rs 4,098 crore.
Radhakishan Damani-led company informed the exchanges that the issue has been approved by the company board to the tune of 2 crore equity shares of face value Rs 10 each, at a floor price of Rs 1,999.04 apiece, through the QIP. This would translate into a size of Rs 4,500 crore, or about USD 633 million, at the current market price.
Avenue Supermarts shares on Thursday gained 4.95% to the intraday high as well as its new-52 week and all-time high of Rs 2,360.75 today, as against its previous close of Rs 2,249.30. Avenue Supermarts stock price is in line with 'Retailing' sector, that has gained by 3.19% intraday on BSE. In the meanwhile, Sensex has gained 0.40%. The market-capitalisation of the large-cap stock currently stands at Rs 1,46,510 crore. Volume-wise, 0.70 lakh and 10.5 lakh shares are changing hands on BSE and NSE counters. Market depth data indicates 91% buyers bidding against only 9% sellers offering the stock.
The stock price has gained 12.14% in the last 4 days of gain. Overall, the stock has climbed 13% in one week, 30% in one month and 54% in a year. Avenue Supermarts shares trade higher than its 5, 20, 50, 100 and 200-day moving averages.
Avenue Supermarts stock has risen 290% from the listing price of Rs 604.4 on the Bombay Stock Exchange on 21 March, 2020.
The promoters have to shed 5.21% stake to comply with regulatory norms. At the current market price, 5.21% stake would be valued at around USD 1.03 billion, or Rs 7,350 crore. "Company may at its discretion consider offering a discount of not more than 5% on the floor price so calculated for the issue," the filing added.
As per SEBI's minimum public shareholding (MPS) guidelines, the promoters of the listed companies cannot own more than 75% stake and public shareholders are required to own a minimum of 25%. Currently, promoters of Avenue Supermarts hold 80.21% stake in the company.
"Our company proposes to utilise the net proceeds to augment long-term resources for financing our expansion plans, which include funding expenditure towards implementation of our strategy on expanding our store network and increasing the efficiency of our supply chain network, including warehousing facilities and related acquisition of land," Avenue Supermarts said in a stock exchange filing.