Blue Star shares hit 52-week high on launch of QIP to pare debt

Shares of Blue Star have risen over 14 percent in the past month.

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Shares of Blue Star opened nearly 8 percent higher and hit a 52-week high of Rs 863.30 on September 20 after the company floated a qualified institutional placement (QIP) issue to raise funds.

At 09.22 am, shares of Blue Star were trading 7.22 percent higher at Rs 857.80 on the National Stock Exchange.

The floor price for the QIP is set at Rs 784.55 per share, which reflects a 2 percent discount to Monday's closing price of Rs 800.05. The company, at its discretion, may offer a discount of not more than 5 percent on the floor price.

The executive management committee of the company will hold a meeting on September 22 to consider the issue price.

The board of the consumer durables company had approved a proposal to raise up to Rs 1,000 crore through QIPs or any other method suitable in one or more tranches during its April-June quarterly results. The fundraising was attributed to funding the company's growth aspirations.

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A part of the funds raised will also be used towards paring some of the company's debt, as highlighted by Blue Star's Vice Chairman and Managing Director Vir Advani in an interaction with CNBC-TV18 early in August.

"As we raise this money, part of it will go to retire some of this debt and more of it will go into investment in our Sri City plan, which is recommissioned phase one; phase two is being commissioned by March of 2024 and then we have a phase three that is planned as well. So, it's a combination of retirement of debt as well as funding for growth," Advani had told CNBC-TV18.

Moreover, he had also stated that the company was aiming to clock in double-digit growth in FY24. Shares of Blue Star have rallied over 14 percent in the past month.

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