Laxmi Organic Industries shares soar 13% as company raises Rs 259 crore via QIP

Shares of Laxmi Organic Industries Ltd rose sharply in Wednesday's trade after the company raised Rs 259 crore through the Qualified institutions placement (QIP) route. The stock surged 12.82 per cent to hit a day high of Rs 305.90 over its previous close of Rs 271.15. At today's high price of Rs 305.90, the scrip has gained 38.60 per cent from its 52-week low of Rs 220.70, a level seen on March 29, 2023. Despite the said rise, it was down 10.21 per cent from its one-year high of Rs 340.70, hit on October 11 last year.

The company, in a BSE filing, said its fund-raising committee of directors approved the issue and allotment of 9,625,579 equity shares to qualified institutional buyers as a part of its fundraising plans. The shares were allotted at an issue price of Rs 269.20, i.e. at a premium of Rs 267.20, aggregating to Rs 259.12 crore.

The issue opened on October 5 and concluded on October 10. ICICI Mutual Funds bought 48.24 per cent of the QIP. Societe Generale, Turnaround Opportunity Fund, Ashoka India Equity Investment Trust PLC and Authum Investment & Infrastructure Ltd purchased 19.92 per cent, 10.42 per cent, 9.65 per cent and 7.72 per cent, respectively.

On technical setup, the counter was trading higher than the 5-day, 10-, 20-, 30-, 50-, 100-, 150- and 200-day simple moving averages (SMAs). The counter's 14-day relative strength index (RSI) came at 60.64. A level below 30 is defined as oversold while a value above 70 is considered overbought. The company's stock has a price-to-equity (P/E) ratio of 67.13 against a price-to-book (P/B) value of 5.07.

The scrip has an analyst target price of Rs 257, Trendlyne data showed, suggesting a potential downside of 14 per cent in a year. It has a one-year beta of 1.09, indicating high volatility on the counter.

Support on the counter could be seen at Rs 290. "Laxmi Organics looks bullish on the daily charts with strong support at Rs 290. A daily close above resistance of Rs 303 could lead to target of Rs 320 in the near term," said AR Ramachandran from Tips2trades.

"Recently, the said counter has gained momentum after hitting its crucial support of Rs 270. Currently, the scrip has confirmed its bullish reversal pattern. One can buy in the zone of Rs 295–300 with a stop loss of Rs 275 for an upside target of Rs 335," said Jigar S Patel, Senior Manager - Technical Research Analyst at Anand Rathi Shares and Stock Brokers.

Laxmi Organics Industries is the Goenka Group's flagship company. In the June 2023 quarter, promoters held 72.39 per cent stake in the firm.

(Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.)

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