Jay Bharat Maruti Shares Rally on Fundraise Plan
Shares of Jay Bharat Maruti rose 5% in early trade on September 13, 2023, after the company announced that its board will review a proposal to raise funds at the Annual General Meeting scheduled for September 16.
The company did not disclose any details on the quantum of funds it plans to raise or how it plans to use the proceeds. However, the company had earlier announced plans to invest Rs 300-350 crore in phases to set up two manufacturing units in Kharkhoda, Sonipat, in Haryana and SMG Suppliers’ Park in Gujarat.
The new plant at Sonipat will increase the company’s capacity, enabling it to meet the demands of Maruti Suzuki’s upcoming manufacturing plant at IMT Kharkhoda, which is scheduled for commissioning by FY2025. In addition to this, Jay Bharat Maruti plans to establish an assembly unit within its new Gujarat facility to provide automotive assemblies.
The stock has surged over 29% in the past three months, despite falling over 3% in the past week. These gains on a three-month basis were despite the company’s disappointing earnings in the June quarter which saw a 35% drop in net profit, along with a near 4% fall in revenue.
The recent rally in the stock price is likely due to the positive sentiment surrounding the fundraise plan. The company’s plans to expand its manufacturing capacity are also seen as positive by investors.
However, investors should exercise caution before making any investment decisions, as the company has not yet disclosed any details on the quantum of funds it plans to raise or how it plans to use the proceeds.
The company is a joint venture between JBM Group and Maruti Suzuki India.
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