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Key Highlights Of The CG Power Rs. 3000 Crore QIP:
QIP Launch:
CG Power, an energy solutions provider, plans to raise Rs 3,000 crore through a Qualified Institutional Placement (QIP) by December-end.
Fund Allocation:
The proceeds from the QIP will be utilized to fund acquisitions, capital expenditure (capex) plans, and its foray into the semiconductor domain.
Investment Bankers:
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IIFL, HSBC, and DAM Capital have been appointed to manage the QIP.
Recent Acquisitions:
Renesas Electronics:
CG Power has acquired the radio frequency components business of Renesas Electronics, a supplier of advanced semiconductor solutions, for about $36 million to enter the semiconductor design business in a good way.
GG Tronics India:
The company has acquired about 55% stake for about Rs 319 crore approximately in GG Tronics to bolster its railway business.
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Expansion Plans:
Semiconductor:
The Company is establishing an Outsourced Semiconductor Assembly and Test (OSAT) facility in partnership with foreign entities.
Transformer Manufacturing:
The company is expanding its transformer manufacturing capacity by 5,000 MVA.
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Financial Performance:
Q2 FY25:
The company’s revenue has increased by about 20% to about Rs 2,412.7 crore, driven by strong sales of motors, transformers, automation systems, and smart grid solutions.
Net Profit:
The company’s net profit declined to 8.8% due to rising raw material costs.
Future Outlook:
With the QIP funds and strategic acquisitions, CG Power is poised to strengthen its position in the energy solutions market and capitalize on emerging opportunities in the semiconductor industry.
Why CG Power share price rising?
The surge in CG Power’s share price can be attributed to several pivotal factors:
Positive Analyst Ratings: Analysts have given a strong “Buy” rating for CG Power, with some projecting up to a 49% increase, boosting investor confidence.
Sector Growth Prospects: The power transmission sector is highly poised for significant growth, mainly driven by rising electricity demand and renewable energy targets. CG Power is strategically well-positioned to capitalize on these potential opportunities.
Strong Financial Performance: CG Power reported a notable increase in total income for Q4 FY24, enhancing its market appeal.
Technical Indicators: Bullish technical signals, such as breaking above key resistance levels and forming higher lows, suggest a positive momentum reversal.
These combined factors have contributed to the rising appeal of CG Power’s stock, making it a favorable investment choice.
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