*Gujarat Fluorochemicals - Balance-sheet strengthens as Inox W | DM Stocks

*Gujarat Fluorochemicals - Balance-sheet strengthens as Inox Wind clears bulk of advances* (from our chemicals' desk - Archit)

Gujarat Fluorochemicals has received Rs 6.23bn from Inox Wind Ltd against the advances rolled out to them for setting up wind power.
The total advances rolled out were to the tune of Rs 8.7bn. For which Inox wind was to put up a 20 MW plant (for Rs 1.7-2.0bn) for Gujarat fluorochemicals. Adjusting for the same, current repayment of advances comes to Rs 6.23bn.
Inox Green energy, a subsidiary of Inox Wind recently raised Rs 7.4bn though IPO which will largely be used to repay debt. Debt repayment will pare down corporate guarantees taken by Gujarat fluorochemicals towards Inox Wind energy.
Even though corporate guarantees amount to Rs 22.2 bn, debt repayment can take place through other routes like warrants conversion, sale of certain assets in its subsidiary etc.
Also, the company is in negotiations with the bank to extinguish guarantees against Gujarat fluorochemicals as Inox Winds Balancesheet appears to be strong with the recent debt reduction.
The company has guided to completely clean up guarantees and advances by the end of FY23 and has been walking their talk.
The current development is a significant positive restoring faith in managements guidance.
We are buyers on the stock with a target price of Rs 4,922/share.

Press release - https://www.bseindia.com/xml-data/corpfiling/AttachLive/47c30166-5f83-4faf-b6c0-c509ec7bb94d.pdf