LIC and Quant Mutual fund allotted 89,55,233 and 44,77,611 shares of multibagger stock; company reduces its debt- keep an eye on this stock!

Completed a Qualified Institutions Placement (QIP), raising a substantial sum of Rs. 3,000 crore

Last week, the NSE benchmark Nifty 50 index saw a robust uptick of 0.75 per cent, buoyed by strong performances in sectors like Nifty Metal, Auto, and Banking. Notably, the index breached the significant milestone of 22,400 for the first time, albeit concluding the week just shy of this mark due to profit-taking activities at higher levels.

Among the stocks poised for attention in the forthcoming week is Swan Energy Limited (SEL), a distinguished global conglomerate with diversified interests spanning Real Estate, Textiles, Oil & Gas, Defence, Commercial Shipbuilding, Ship Repairs, and Heavy Fabrication.

Over the past year, SEL has demonstrated remarkable growth, registering a staggering surge of 190.13 per cent. Moreover, its performance over the last three years has been nothing short of extraordinary, with returns skyrocketing by an impressive 397.35 per cent, turning out to be a multibagger stock. 

Recently, SEL successfully completed a Qualified Institutions Placement (QIP), raising a substantial sum of Rs. 3,000 crore. Priced at Rs. 670 per share, inclusive of a premium of Rs. 669 per share, the QIP garnered substantial interest from a plethora of qualified institutional investors, including Quant Mutual Fund, SBI Life, LIC, LIC Mutual Fund, Tata Mutual Fund, Infini Mutual Funds, SBI General Insurance, BNP Paribas Mutual Fund, Nomura, Diamond Asia, Bank of India Mutual Fund, ITI Mutual Fund, Goldman Sachs, Future Generali, Anand Rathi, and various other domestic and foreign institutions and family offices.

These funds are earmarked for strategic initiatives, primarily focusing on the modernization of the recently acquired erstwhile Reliance Naval and Engineering Ltd (RNEL) shipyard at Pipavav. Additionally, a portion of the proceeds will be allocated towards project expansion and debt reduction endeavors.

SEL has undertaken rigorous efforts towards the restoration of its shipyard, emphasizing activities such as dredging, reinstatement of licenses and certifications, implementation of industry-standard safety protocols, and upgrading basic utilities. Engaging a renowned global consulting firm and recruiting top industry talent underscore SEL's commitment to expedite the turnaround of the facility, with commercial operations targeted to commence by June 2024.

A dedicated arm of the Swan Group is overseeing procurement and supply chain management to cater to downstream activities' demands. Moreover, SEL is actively mobilizing human resources, with plans to upskill and absorb employees through an internal selection process, ensuring strict adherence to statutory requirements.

Quant Mutual Fund, among others, has been allotted 89,55,233 shares across various schemes, while Life Insurance Company and SBI Life Insurance Company each received an allotment of 44,77,611 shares.

It's imperative to keep a close eye on SEL, especially considering its subsidiary SLPL's recent feat of fully pre-paying a substantial loan, inclusive of accrued interest, to a consortium of banks, amounting to Rs. 2206 crore. Noteworthy is the significant reduction in the group's external debt position, which stood at Rs. 4,128 crores in September 2023, decreased to Rs. 3,817 crores in December 2023, and currently stands at Rs. 1,675 crores.

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