Venus Pipes shares rise 11% as board clears plan to raise Rs 372 crore

Venus Pipes & Tubes Ltd shares rose 11% in Wednesday's trade after the company proposed to raise up to Rs 372 crore through a preferential issue of equity shares. The fundraise will primarily be used to repay or prepay existing borrowings.

The company plans to issue 22,27,544 new equity shares at Rs 1,670 per share, aggregating to around Rs 372 crore. Of the total proceeds, Rs 344 crore will be used towards repayment or prepayment of borrowings, including applicable charges and accrued interest, while the remaining Rs 28 crore will be used for general corporate purposes.

Venus Pipes & Tubes shares hit an intraday high of Rs 2,158, compared with their previous close of Rs 1,940.25. The stock opened at Rs 1,945.05 and touched an intraday low of Rs 1,942.90.

The preferential shares will be allotted to 18 identified non-promoter investors, including funds managed by WhiteOak Capital, Carnelian Bharat Amritkaal Fund, Tata Business Cycle Fund, Tata Multicap Fund, Kotak Mahindra Life Insurance Company and investor Ashish Kacholia.

The issue price of Rs 1,670 per share is marginally above the regulatory floor price of Rs 1,669.37. The floor price was determined based on the applicable pricing formula, with the 10-trading-day volume-weighted average price (VWAP) of Rs 1,669.37 being higher than the 90-trading-day VWAP of Rs 1,610.44.

The company has fixed 1 October 2026 as the "Cut-off-Date" for the purpose of determining the eligibility of the members entitled to vote by remote e-voting.

Following the proposed issue, Venus Pipes' total outstanding shares would increase from around 20.72 million to 22.94 million. Promoter shareholding would consequently decline from 48.41% to 43.71%, while non-promoter shareholding would increase from 51.59% to 56.29%. The company has said the transaction will not result in any change in management or control.

The preferential issue is subject to shareholder approval through a special resolution at the company's Extraordinary General Meeting on October 8, 2026. The proposed allotment will also be subject to the required regulatory approvals.