Suzlon Energy Announces Right Issue Of 5:21 At 45% Discount

The penny stock Suzlon Energy announced the right issue in a ratio of 5:21 at a discount of 45% to its market price. Here are the complete details!

Suzlon Energy’s journey from being the darling of investors to being a penny stock has been nothing short of a spectacular Bollywood film as the stock fell from its peak of 4 digits to a single digit value!

Suzlon Energy has long been associated with renewable energy and has consistently supported India’s transition to green energy. 

Their support of tactics and technologies to combat climate change, which began decades ago, is now a cornerstone of global roadmaps for the energy transition.

The company announced the outcome of the Board of Directors’ Securities Issue Committee meeting on Sunday. 

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At the meeting, the board resolved to issue the company’s equity shares via a right issue to the qualified equity shareholders of the corporation.

A corporation generates money through a right issue by issuing additional shares, but exclusively to current shareholders.

The fixed issue price for equity shares is Rs 5, which represents a discount of 45% from the most recent NSE trading price. 

Out of ₹ 5, the initial payment of ₹ 2.5 each equity share is due upon application, and the remaining ₹ 2.5 is due upon the next call (s).

Ratio of right to entitlement: 5:21 (Five Rights Equity Shares for every Twenty-One fully paid-up Equity Shares held by the eligible equity shareholders of the Company, as on the record date as may be notified subsequently). 

Any eligible equity shareholder will be entitled to at least 1 (One) equity share if their shareholding is 5 (Five) or more.

It’s interesting that shareholders are awarded rights entitlements in proportion to the quantity of securities they held on the record date. 

An investor may choose not to purchase the rights issue and simply let the ‘right’ expire. 

As an alternative, the shareholder may swap or relinquish the entitlement in favor of someone else in exchange for a fee.

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The stock has become a multi-bagger as a consequence of its recent gains of 43.31 percent over the past year and 193.55 percent over the past three years, which are both mind-blowing returns.

On its way to becoming a carbon-neutral economy, India is at a crucial turning point. India has a key spot on the roadmap for the global energy conversion as a result of its enormous potential for renewable energy, innate manufacturing skills, and growing domestic customer base. 

To keep the promise made by the Prime Minister at COP26 to achieve the goals for the global environment, Indian Renewable Energy must grow every year throughout the country.

In June 2022, India’s operational renewable energy capacity was 161 GW, or 39.8% of the nation’s total installed power capacity. Wind energy today contributes more than 25% of all renewable energy sources.