Equity Alert: Suzlon Energy down 5% as rights issue news surprises
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Equity Alert: Suzlon Energy down 5% as rights issue news surprises
MUMBAI--12:37PM-- Shares of wind turbine maker Suzlon Energy
slipped over
5% to 185.40 rupees as the company's rights issue plans surprised
market and
raised concerns over equity dilution.
The company today said it would Saturday consider raising 18 bln
rupees
via rights issue.
"Earnings per share would get diluted as the rights issue will
expand
company's equity base even as there are no new revenue streams in near
future," an analyst from a domestic brokerage said.
The timing for the proposed rights issue surprised analysts since
Suzlon
has maintained it had already raised sufficient funds for its projects
and
recent buys via qualified institutional placement, foreign currency
convertible bond issue and debt.
"The share is trading close to its 52-week low. My guess is the
company
will set rights issue price at 170 rupees to give the share some
support at
that level," another analyst said.
Shares of the company are seen weak ahead of the company's
decision on
the rights issue, with support at 175 rupees a share.
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