Multibagger stock: CG Power locks in at upper circuit; stock almost triples in a month

CG Power & Industrial Solutions at its board meeting held on Tuesday said that the company has received a letter from Tube Investments of India Ltd indicating the latter’s offer to infuse additional capital worth Rs 100 crore in CG Power.

The capital is being infused to meet CG Power’s funding requirements & liabilities, and also to stabilise operations as well as improve its liquidity position.  The company will allot 6.87 crore shares of the face value of Rs 2 each at a price of Rs 14.55 per equity share to TII.

Tube Investments of India (TII) has come out as a successful bidder, following the Swiss challenge bidding process that was initiated by the lenders to CG Power. CG Power had earlier said that its board approved an investment of Rs 700 crore by TII for a 56.61 per cent stake. CG Power had reached a securities subscription agreement with Tube Investments to sell 64.25 crore shares at Rs 8.56 each for a total of Rs 550 crore. This gives TII a 50.62 per cent stake in CG Power. Tube Investments will also be allotted 17.52 crore warrants, convertible to an equal number of shares within 18 months from the date of allotment, for Rs 150 crore. Post conversion of the warrants, TII’s stake in CG Power will grow to 56.61 per cent.

The shares of CG Power recovered from a lower circuit of 5 per cent to surge by 4.87 per cent and locked in at its upper circuit at Rs 22.60 per share on Wednesday.