PC Jeweller shares have surged nearly 10% over the past month amid the company's aggressive debt reduction measures, with the stock closing 1.69% lower at ₹9.89 per share on Wednesday. The latest development came as the company announced it successfully cleared and repaid all outstanding debt under the settlement agreement dated September 30, 2024, with respect to one more bank. According to the company's press release, this brings the total number of consortium banks with cleared debt to 5 out of 14. The stock had previously jumped approximately 6% on Monday following the board's approval to raise up to ₹1,000 crore through a Qualified Institutions Placement (QIP), though it shed some gains on Wednesday.
The board approved an increase in the authorised share capital of PC Jeweller from the existing ₹1,310 crore (divided into 1,050 crore shares and 26 crore preference shares) to ₹1,460 crore (divided into 1,200 crore equity shares and 26 crore preference shares) by creating an additional 150 crore equity shares, subject to shareholder approval. As reported by The Economic Times, the board also approved the constitution of a QIP committee for this purpose. The QIP will involve issuance of equity shares with a face value of ₹1 each and other eligible securities, or any combination thereof, through QIP in one or more tranches.
In line with its debt reduction objectives, PC Jeweller has made significant progress in clearing outstanding debt under the Joint Settlement Agreement. The company reported a 24% reduction in outstanding debt to banks during Q1 FY27, and with the latest clearance, has now repaid all outstanding debt of 5 out of 14 consortium banks. According to Goodreturns, the company had earlier this month announced repayment of all outstanding debt of 4 out of 14 consortium banks. The company is progressing toward becoming debt-free by Q2 FY27, with the latest milestone representing a significant step toward achieving this goal.
The company reported a 58% increase in Q4 net profit to ₹150 crore, up from ₹95 crore in the year-ago period. As reported by The Economic Times, this strong financial performance has contributed to the positive market sentiment following the QIP announcement. The company's progress toward debt-free status and robust quarterly results have supported investor confidence despite the initial market reaction to the fundraising announcement.
Despite the recent rally, PC Jeweller's stock closed lower on Wednesday, reflecting some profit-taking by investors. The stock hit an intraday high of ₹10.16 and low of ₹9.75 per share, with a market capitalisation of ₹8,475.29 crore. According to Goodreturns, the stock has delivered close to 10% return in one month but has 34% gains in one year and 40% surge in two years. Market experts note that while debt deleveraging is positive, the stock market is future-oriented and benefits may already be priced in. The focus now shifts to the company's ability to grow revenues, margins, and demand as part of its broader turnaround strategy.
