PC Jeweller Set to Raise Rs 1,000 Crore via QIP as Debt Reduction Hits Milestone
PC Jeweller has officially moved to bolster its capital position by approving a proposal to raise up to Rs 1,000 crore through a Qualified Institutions Placement (QIP).The fundraise is expected to be executed in one or more tranches. The move remains subject to the necessary shareholder and regulatory approvals before proceeding.
To facilitate this capital infusion, the board has approved an increase in the company's authorised share capital from Rs 1,310 crore to Rs 1,460 crore. This will involve creating an additional 150 crore equity shares with a face value of Re 1 each.
This expansion requires a formal amendment to the Capital Clause of the company's Memorandum of Association. The proposal is slated for shareholder approval to finalize the structural changes.
Strategic Debt Reduction and Path to Becoming Debt-Free
While seeking fresh capital, PC Jeweller is simultaneously making significant strides in cleaning up its balance sheet. The company reported a further 24 per cent reduction in outstanding debt during the current quarter.This progress brings the total debt reduction to more than 90 per cent since the company signed a joint settlement agreement with lenders in September 2024. Management views this as a critical turnaround milestone for the organization.
The company expects to become entirely debt-free during the current quarter. This transition is expected to significantly strengthen the balance sheet while lowering interest costs and enhancing overall financial flexibility for future operations.
Market Reaction to Capital Raise and Debt Overhaul
Despite the positive news regarding the Rs 1,000 crore QIP and the aggressive deleveraging strategy, market sentiment showed immediate cooling. Shares of PC Jeweller were trading at Rs 9.76 apiece during the session.The stock price witnessed a decline of 5.52 per cent from its previous close. Investors appear to be weighing the long-term benefits of the debt-free status against immediate price action and regulatory hurdles for the capital raise.
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