Swan Energy hits lifetime high after NCLT nod to acquire Reliance Naval

Once RNAVAL is acquired, the company will have a new and robust sector at its behest, the company's management said

Shares of Swan Energy rallied 8 per cent on the BSE to hit a lifetime high of Rs 339 in Tuesday’s intra-day trade on the back of heavy volumes. The stock surpassed its previous high of Rs 337 touched on May 4, 2022.

At 02:21 PM; it was quoting 7 per cent higher at Rs 336 as compared to a 0.18 per cent rise in the S&P BSE Sensex. The average trading volumes on the counter jumped over three-fold today. A combined 3.36 million shares had changed hands on the NSE and BSE.

In the past three days, the stock has surged 18 per cent after it informed the exchanges on December 29 that the National Company Law Tribunal (NCLT) approved the resolution plan submitted by Hazel Mercantile Ltd (HML) to acquire Reliance Naval and Engineering Ltd (RNEL). Swan Energy is in a strategic partnership with HML through an SPV named Hazel Infra Ltd (HIL) to acquire RNEL.

"The NCLT has published a written order on 28th December, 2022, which sets out in detail the provisions of the Resolution Plan (including the financial proposal, treatment of claims of stakeholders of the Company)," Swan Energy said in a filing.

Meanwhile in the past six months, the stock price of Swan Energy has appreciated 85 per cent as compared to a 16 per cent rise in the S&P BSE Sensex. Further in the past one year, it has zoomed 131 per cent as against a 3.5 per cent gain in the benchmark index.

Presently, apart from textiles and real estate sector, Swan Energy has started diversification into other sectors through its subsidiaries to have presence in various businesses such as LNG port terminal, trading in petro products, defence ship building. Once RNAVAL is acquired, the company will have a new and robust sector at its behest, the management said.

In the energy sector, with the expected completion of the construction of LNG Port terminal of 5 MMTPA and its likely commissioning in financial year 2022-23, the bottom line of the company is expected to improve substantially. The project has tremendous growth potential with provision for doubling its capacity to 10 MMTPA, the company said in its FY22 annual report.

Meanwhile, for the first half (April-September) of financial year 2022-23 (H1FY23), Swan Energy had posted a consolidated net loss of Rs 107 crore due to higher cost of material consumed. The company had posted a net loss of Rs 76.86 crore in H1FY22.

Revenue from operations during the period has more-than-doubled to Rs 403.85 crore against Rs 105.60 crore in the same period last fiscal.