Sobha Shares Surge 5% To All-Time High After Fundraising Approval

Shares of Sobha gained 5% on Thursday morning session after the company approved the offer and issuance of rights issue worth ₹2,000 crore. The realty stock also hit a new all-time high of ₹2,220.

What Happened: The realty company approved the rights issue of 1.21 crore shares worth ₹2000 crore. The price for the rights issue is fixed at ₹1,651 per share. This is at a 19% discount to Wednesday's closing price of the stock.

Companies use rights issues to offer more shares to existing shareholders at a discount. 

The rights issue will open on June 28 and will close on July 4. The record date for the issue is on June 19 and an investor who holds 47 shares of the company will get 6 shares, Sobha said in its regulatory filing. 

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In its March quarter results, Sobha reported an 85.52% year-on-year decline to ₹7.02 crore. Its revenue from operations fell 36.94% to ₹762.82 crore. However, the company recorded its highest-ever annual sales with a sales value of ₹6644.1 crore growing by 27.8% YoY.

Nuvama Institutional Equities in a note in May had given a "buy" call on the stock with a target price of ₹2254. The brokerage expects the buoyancy in sales and cash flow to sustain as the company recorded its highest-ever pre-sales in FY24. 

Price Action: Sobha stock gained 5.34% to ₹2,172.70 on Thursday morning. 

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