Shares of CESC Ltd, a RP-Sanjiv Goenka group firm present in power business, fell today on speculations about weak demand for shares being sold through a Qualified Institutional Placement (QIP).
The stock was down 1.1 per cent in early afternoon trade at Rs 664.45 on the BSE, after hitting a low of Rs 656.85 earlier in the day.
Traders attributed the fall in stock price to speculations about a weak demand for CESC shares being sold through QIP route, through which the company planned to raise up to USD 150 million (about Rs 900 crore) to fund its ongoing and future projects and expansions.
The bankers said they were targetting to raise USD 100 million from the QIP, as against the earlier target of up to USD 150 million.
Traders said the stock price fell in the secondary market on speculations that the QIP shares were being offered at a discount to the current market price.
Last month, the CESC board approved a proposal for issuance of equity shares or convertible debentures to qualified institutional investors. The proposal was approved at an Extraordinary General Meeting of shareholders on October 18. There have been reports that the funds could be used to acquire some power projects.
Its first power project outside West Bengal has been completed with the commissioning of its 600 mega watt plant at Chandrapur, Maharashtra, in August while another 600 mw power plant at Haldia is likely to get commissioned in October.
The company already has four power stations in West Bengal with total production of 1,225 megawatt. It also has plans to set up power projects in Odisha and Bihar. In wind power, it has a plant in Rajasthan and another one is being set up in Gujarat.
The Rs 14,000-crore RP-Sanjiv Goenka Group is also present in multi-format retail business through Spencer's Retail.
