Hubtown Shares Plummet as Company Withdraws Proposed Share Issue

Hubtown Shares See Significant Drop

On December 11, the shares of Hubtown experienced a decline of over 9 percent. This drop occurred after the company announced that it would be withdrawing its proposed preferential issue of shares. The shares closed at Rs 229 apiece on Thursday, marking the fifth consecutive session of losses. In just five days, the stock has fallen by 25 percent.

Reasons Behind the Withdrawal

According to Hubtown, the decision to withdraw the proposed preferential issue was due to a lack of interest from potential investors. The company cited current market conditions, marked by uncertainties and volatility, as well as delays in approval from the BSE and NSE, as the primary reasons for this lack of interest.

The company stated, 'In view thereof, we hereby inform you that the Proposed Preferential Issue stands withdrawn. As a result, the Company will not be proceeding further with the issue and allotment of equity shares of the Company as part of the Proposed Preferential Issue, as initially proposed.'

No Material Impact Expected

Hubtown has assured its stakeholders that the withdrawal of the preferential issue plan will not have any significant impact on its business operations or financial stability. The company may explore alternative methods to raise capital as needed for its business.

Previous Approvals and Price

The board of directors at Hubtown had initially approved the proposal to issue nearly 1.47 crore equity shares on a preferential basis to private investors on August 30. The application for in-principle approval was submitted to the BSE and NSE on September 2. The shareholders of the company approved the proposed preferential issue at its Extraordinary General Meeting (EGM) held on September 23 this year.

The BSE and NSE gave their respective in-principle approvals for the proposed preferential issue at a price of not less than Rs 341 per share to non-promoters on December 5. Notably, the issue price was more than 14 percent higher than the December 5 closing level of Rs 298.5 per share.

Stock Performance

Hubtown shares have fallen around 24.5 percent in the past five days and around 30 percent in the past one month. However, the stock has gained more than 20 percent in the past six months, but is down around 14 percent in 2025 so far. Its P/E ratio currently stands at over 27.