80% YTD Returns: Low PE Engineering Stock Approves Rs 330 Crore Rights Issue

Ratnaveer Precision Engineering has approved a rights issue worth Rs 330 crore as the company looks to strengthen its capital base and fund its expansion plans, including its proposed Copper Clad Laminate (CCL) project. The company's board approved the fundraise on August 20 through the issuance of 1,24,99,669 equity shares at Rs 264 apiece, including a premium of Rs 254 per share.

The rights entitlement has been fixed at seven equity shares for every 40 equity shares held by eligible shareholders. The record date for determining shareholders eligible to participate in the issue has been set as August 26, while the opening date of the rights issue will be announced separately.

The company plans to use the proceeds to support its growth and expansion initiatives. A key focus will be its Rs 472.34 crore Copper Clad Laminate project, which is targeted to commence commercial production in November 2026. Ratnaveer is developing the facility as what it describes as India's first fully integrated CCL manufacturing unit under the Government of India's Production-Linked Incentive scheme for electronics.

The fundraising announcement follows a strong financial performance in the June quarter. Ratnaveer's total revenue rose 20 per cent year-on-year to Rs 318 crore in Q1 FY27 from Rs 265 crore in the corresponding quarter of the previous financial year. EBITDA stood at Rs 36 crore, with the EBITDA margin at 11.3 per cent, while profit after Tax increased 21 per cent year-on-year to Rs 18.2 crore.

Vijay Sanghavi, Managing Director and CFO of Ratnaveer Precision Engineering, said the company began FY27 on a positive note, supported by momentum in its core businesses and progress in its strategic initiatives. He also highlighted the progress of the CCL project, improved Infomerics credit ratings, regulatory approvals and industry recognition as signs of the company's underlying business strength.

Ratnaveer Precision Engineering manufactures stainless steel finished sheets, washers, Solar roofing hooks, tubes, pipes and other precision engineering products. The company is also expanding into advanced electronic materials through its CCL project.

Ratnaveer Precision Engineering's share price surged nearly 5 per cent to hit a fresh 52-week high of Rs 282.50 apiece on the BSE on August 21, although it also touched an Intraday low of Rs 267.60. The stock has delivered strong returns in recent weeks, rising nearly 20 per cent in one week, more than 34 per cent in two weeks and 56 per cent over the past month.

Over longer timeframes, the stock has gained 48.48 per cent in three months and 67.65 per cent in six months. On a year-to-date basis, Ratnaveer Precision Engineering shares have surged 79.65 per cent, reflecting strong investor interest ahead of the company's expansion plans and the proposed rights issue.

Disclaimer: The article is for informational purposes only and not investment advice.