Titagarh Wagons to raise Rs 288 crore via preferential allotment of shares

The company said its board has given the nod for allotment of 76 lakh shares to the Capital Group company. (Representative Image)

Wagon manufacturer Titagarh Wagons, now known as Titagarh Rail Systems Limited, on June 10 said its board has approved the proposal to raise Rs 288.8 crore via a preferential allotment of shares to Smallcap World Fund Inc.

In a regulatory filing, Titagarh Wagons said the board gave the nod for issuance of upto 76 lakh shares to the Capital Group company.

“Raising of funds through issuance of upto 76,00,000 equity shares of face value of Rs 2 each on a preferential basis to Smallcap world Fund Inc, a part of Capital Group, at a price of 380 per share as against floor price of Rs. 347.68 per share for an aggregate amount of up to Rs 288,80,00,000,” the filing noted.

This is subject to approval of the offer by regulatory/statutory authorities and the shareholders of the Company at the Extra-Ordinary General Meeting (EGM) and such other permissions, sanctions and statutory approvals, as may be required.

According to market sources, ICICI Securities acted as the advisor for the Titagarh Wagons fund raise.

The company’s stock price climbed 285.26 percent in the last year, making it a multibagger as a result of the government’s strong support for capital expenditures in the infrastructure sector.

The announcement by Titagarh Wagons comes a fortnight after the company reported net profit at Rs 53.01 crore in March 2023, up 151.87 percent from Rs. 21.05 crore in March 2022. Its net sales stood at Rs 974.22 crore, up 132.56 percent from Rs 418.90 crore in March 2022.

Shares of Titagarh Wagons ended on June 9 at Rs 421.85 on the NSE, up 6.69 percent from the previous close. The stock had hit a high of Rs 424.10 intraday.