Welspun Corp up 8% on reports co plans to put renewable energy business on the block

NEW DELHI: Shares of Welspun Corp shot up nearly 8 per cent in Monday's trade on media reports that the company has roped in investment bank Barclays to help the BK Goenka company sell its renewable energy business.

Quoting two people with direct knowledge of the development, Economic said the move was made to trim company’s debt amid weakening business margins due to consistent fall in solar power prices.

The stock surged 7.88 per cent to hit a high of Rs 116.30. This was the second day for consecutive gains for the stock. Shares of the pipemaker had surged 10.45 per cent in Friday's session after the company said it had bagged an order to supply @ 216K MTs line pipes for an onshore project in the US.

Yet, the stock is 32 per cent down from its 52-week high of Rs 153.60 hit on August 5 this year.

Vineet Mittal, Vice-Chairman of Welspun Renewables, denied the group has put the business up for sale, but said the company is seeking to raise money from the market. "There are multiple options to raise money, especially post the government push and vision to power a clean and a green India with a focus on solar," he said in an email response to ET.

The group recently sold its sponge iron making unit to JSW Steel and two ready-to-build coalfired power plants to the Adani Group to raise funds and pay back debt. The two people who spoke to ET said the latest move to sell the solar business, housed under Welspun Energy, is a part of plan to further trim its heavy debt.

"It makes sense for overseas strategic companies to buy these businesses as they take a longer-term view," said the managing director of a solar power producer, who is aware of the sale process by Welspun group but asked not to be named as the talks are private.