Rossari Biotech share drops 5% on board nod to raise Rs 300 crore

Shares of Rossari Biotech fell 5 per cent to Rs 1,056.8 in intra-day trade on Bombay Stock Exchange on Wednesday as investors resorted to profit booking after the company board gave nod to issue equity shares aggregating to Rs 300 crore on preferential basis. The stock has declined 68 per cent from its 52-week low of Rs 1,056.80, touched on July 23, 2020.

On Wednesday, Rossari Biotech share price opened lower at Rs 1,104.10 against previous close price of Rs 1,112.45. On the volume front, there was surge in selling as 13,000 shares changed hands over the counter as compared to two-week average volume of 11,000 stocks on the BSE.

In a similar trend, Rossari Biotech shares were trading 3.46 per cent lower at Rs 1,072.90. The stock touched an intraday high and low of Rs 1,101 and Rs 1,056.40.

Rossari Biotech shares were listed on domestic bourses on July 23, 2020, after getting overwhelming response from investors for its Rs 496 crore IPO. The stock was listed at Rs 670 on BSE, a premium of 57.65 per cent over its issue price of Rs 425.

In an exchange filing on Tuesday, Rossari Biotech said that its board of directors approved the issuance of up to 30,12,046 equity shares of face value of Rs 2 each, on a preferential basis, subject to regulatory approval. 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, it said.

"The Board of Directors, in accordance with Chapter V of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018, as amended, and other applicable laws, determined a floor price of Rs 996 per Equity Share or such higher price, aggregating to Rs 300 crore," it said in a regulatory filing.

The proposed issue will bring on board high-quality and marquee shareholders of scale and repute, the company said. Rossari proposes to utilise the net proceeds to evaluate &invest in inorganic growth opportunities, with in its core chemistries, with a view to diversify its product portfolio, expand 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.

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

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