PG Electroplast Raises ₹1,499 Cr via QIP, Expands EV Manufacturing

PG Electroplast Ltd. has approved the allotment of over 2.14 crore equity shares to Qualified Institutional Buyers (QIBs) at an issue price of ₹699 per share, raising ₹1,499.9 crore. The issue price represents a 0.88% discount to the floor price. 

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As a result of this allotment, the company’s paid-up equity share capital increased from ₹26.16 crore, comprising 26,16,34,440 shares, to ₹28.31 crore, comprising 28,30,93,658 shares.

The funds raised through this Qualified Institutional Placement (QIP) will be used for several purposes, including investments in the company’s subsidiaries, PG Technoplast and Next Generation Manufacturers Pvt., repayment and prepayment of existing liabilities, and general corporate purposes. 

This development follows the company’s recent foray into the electric vehicle (EV) sector through a partnership with Africa-based Spiro Mobility, an affordable electric two-wheeler company. Under this agreement, PG Electroplast will serve as the exclusive manufacturing partner for Spiro Mobility’s electric vehicles in India.

The company reported a strong financial performance in Q2 FY25, with revenue increasing by 46% year-on-year (YoY) to ₹671 crore. Although gross margins declined by 140 basis points YoY, operating margins held steady at 9%, supported by cost efficiencies. EBITDA for the quarter grew by 48% YoY, reaching ₹61 crore.

On December 10, 2024, PG Electroplast’s share price closed at ₹826, reflecting a dip of 3.28%. Despite this decline, the stock has shown robust year-to-date returns of 258.02%, significantly outperforming the Sensex, which rose by 12.44% in the same period. 

The stock remains above key moving averages, indicating strong market performance despite short-term fluctuations.

According to Bloomberg data, out of the eight analysts covering PG Electroplast Ltd., six have issued a 'buy' rating for the stock, while one recommends a 'hold' and another a 'sell.' Despite the positive sentiment from the majority, the average 12-month price target from analysts suggests a potential downside of 17% from the current levels.

Analysts at MarketsMOJO have issued a "Buy" recommendation for PG Electroplast, citing its consistent market performance and strategic initiatives. While the stock saw a brief setback, it has reached a new 52-week high of ₹869.95, reinforcing confidence in its long-term growth potential. 

The company's solid fundamentals, strong momentum, and strategic expansion into new sectors position it as a key player in the consumer durables and electronics industry.