RBC Europe analyst Tyler Broda attributed the upgrade from "sector perform" to the rights issue providing "crucial de-risking" to Petra's balance sheet and a "clearer path through the key ramp up phase".

Broda noted the $178 million injection meant Petra's balance sheet no longer carried high-cost South African debt and also improved cash flow by an estimated $6 million per annum.

Petra said previously it planned to use up to $120 million of the proceeds to fully pay down outstanding debt with the South African Lending Group.

Broda added that the weak South African rand should also help cash flow.

"Our forecast suggests ND/EBITDA will now be below 2x through calendar 2019. However, the biggest improvement is the step change in the equity story that comes from bringing the balance sheet forward by nearly three years", he said.

"This relief allows Petra to focus on operations, and to finally move the Cullinan cave toward planned volumes and cash flow."

Broda added that the improved balance sheet should also increase Petra's long-term diamond price optionality attributed by investors due to the reduced financial risk.

The diamond market was also expected to move higher, as it had not yet seen the recovery experienced by other commodities.

"We see diamond market exposure as compelling over the coming 12-24 months," Broda said.

RBC's reasons were the diamond market's stronger exposure to the US' growth and domestic tax cuts than other commodities and supply growth moderation in 2019 from De Beers and Alrosa.

It also noted that diamond prices had relative inflation protection should the wider economic environment be stagflationary, with high inflation rates, slowing economic growth rate and steadily high unemployment.

Broda did remain cautionary though, noting that, with the Cullinan mine ramp up accelerating, there remained inherent risks until caving rates, diamond grades and values were understood at the full production rate.

He added there was continued pressure on the diamond market in smaller quality goods, with fears of synthetics and growing supply moderating prices.

"This dynamic will be important to track over the coming quarters, especially as Cullinan prices have lagged in recent tenders," Broda said, reducing RBC's base Cullinan price to the low end of the guidance of $140 per carat long-term and $125/ct for the June quarter.

Petra's target price was decreased to 65p (US56c) from 80p.

The company's shares were trading at 52.5p Wednesday, down 1.78%.