Patel Engineering has approved a rights issue of up to ₹500 crore to reduce debt and strengthen its balance sheet. This move comes as the company prepares for a large infrastructure investment cycle in India. As per Mordor Intelligence, the demand for new infrastructure in India is expected to grow at a CAGR of 8% over 2025-30.
The biggest reason for the rights issue is deleveraging. Around 75% of the funds raised will be used to repay existing loans. The rest will be used for working capital and general business needs.
As of September 2025, Patel Engineering had total debt of ₹1,543 crore. Paying down a large portion of this debt will help lower interest costs, improve cash flows, and reduce financial risk
A rights issue allows existing shareholders to invest more in the company while limiting dilution. It also shows management’s focus on financial discipline at a time when infrastructure spending is expected to rise.
More land sales in Hyderabad and Bengaluru are planned, which could further improve liquidity.
As per news reports from the Hindu BusinessLine, the actual size of the rights issue will be ₹400 crore. And the rights issue is not a one-off step. Earlier this year, the company had also raised funds through non-convertible debentures and sold a land parcel in Chennai to improve its liquidity position.
Read more: Patel Engineering Signs MoU to Revive 144 MW Gongri Hydropower Project in Arunachal Pradesh.
Patel Engineering’s rights issue is a strategic move focused on financial stability rather than short-term growth. By cutting debt and strengthening liquidity now, the company is positioning itself to take advantage of upcoming infrastructure opportunities without stretching its balance sheet.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
Investments in the securities market are subject to market risks. Read all the related documents carefully before investing.
Published on: Dec 19, 2025, 2:21 PM IST
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