Torrent Power Launches ₹3,500 Crore QIP at ₹1,503/Share

Torrent Power initiated its Qualified Institutional Placement (QIP) on Monday, aiming to raise approximately ₹3,500 crore by selling a 4.6% equity stake in the company. The indicative price for the issue has been set at ₹1,503 per share, which reflects a 5.3% discount compared to the stock's last closing price and a 3.4% discount to the determined floor price, according to CNBC TV18.

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The floor price, established at ₹1,555.75 per share, represents a 1.6% discount to the company's closing price of ₹1,586.3 on the NSE as of Monday. This price was calculated in accordance with SEBI regulations, as per the company's stock exchange filing.

Funds raised through the QIP will primarily be utilized to repay specific borrowings of Torrent Power and its subsidiaries, along with general corporate purposes. The issue includes a 90-day lock-in period for participating investors.

Earlier reports indicated that Torrent Power, part of the Gujarat-based Torrent Group, intended to raise ₹3,000-4,000 crore via the QIP to support acquisitions and organic growth. These initiatives include capital expenditures for new projects and meeting working capital needs.

On Monday, Torrent Power share price surged 5% to close at ₹1,586.3 on the NSE, boosting the company’s market capitalization to ₹76,240 crore. The stock has gained 68.37% year-to-date, significantly outperforming the Sensex, which rose by 11.04% during the same period.

The fund-raising committee of Torrent Power's board convened on December 2 and approved the commencement of the Qualified Institutional Placement (QIP) issue, the company disclosed in a stock exchange filing.

Earlier, in July 2023, Torrent Power's shareholders had sanctioned the proposal to raise up to ₹5,000 crore. The funding could be raised through the issuance of equity shares, foreign currency convertible bonds (FCCBs), debentures, or other equity-linked instruments.

The company had previously cited the need for working capital and capital expenditure to support the upgradation and expansion of its power generation and distribution businesses, as well as ongoing projects.

In Q2 FY25, Torrent Power reported an 8.6% decline in net profit to ₹496 crore. However, revenue from operations grew 3.1% year-on-year, reaching ₹7,175.81 crore, compared to ₹6,960.92 crore in the same quarter of the previous year.