Small-cap stock BGR Energy Systems hits 5% upper circuit on ₹1,000 crore rights issue plan; gains 15% in July

Shares of small-cap stock BGR Energy hit their 5 percent upper circuit at ₹44.13 per share on Friday, July 05, following the announcement of the company's plans to raise up to ₹1,000 crore through a rights issue of equity shares. The decision was approved by the company's Board of Directors during a meeting held on July 4.

In an official filing with the stock exchanges, BGR Energy Systems Ltd stated, “We wish to inform you that the Board of Directors of the Company has considered and approved the offer and issuance of equity shares of face value of ₹10 each of the company for an aggregate amount, including premium, not exceeding ₹1,000 crores by way of a rights issue to the eligible equity shareholders of the Company as on the record date (to be determined and notified subsequently), in accordance with applicable laws, including the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018, as amended, subject to such approvals, as may be required under the applicable laws (Rights Issue).”

Recently, the stock has shown significant volatility, experiencing a correction of more than 54 percent year-to-date in 2024 and 30 percent over the past year. However, it has witnessed a strong recovery in July, rallying over 15 percent in just 5 sessions of the month. This comes after a 3.4 percent fall in June.

Currently, the stock is over 63 percent away from its 52-week high of ₹119.48, hit on February 20, 2024. Meanwhile, it has advanced 33.33 percent from its 52-week low of ₹33.10, hit on April 1, 2024.

The company further informed that a Rights Issue Committee has been formed by the board to oversee the implementation of the rights issue, with the authority to take all necessary actions in connection with it.

Also, more details regarding the rights issue, including the issue price, rights entitlement ratio, record date, timing, and payment terms, will be finalised in due course, BGR Energy stated.

It also added that the board has sanctioned the increase in the Authorised Share Capital of the Company from ₹100 crore to ₹1,700 crore and proposed alterations to the Memorandum of Association, pending shareholder approval.

BGR Energy Systems Limited, headquartered in Chennai, operates extensively in the utility industry, offering a range of services from product manufacturing to project execution. The company is structured into capital goods and construction segments, along with engineering procurement construction contracts.