Kolkata-based Electrosteel Castings is planning to raise Rs 600 crore through a qualified institutional placement (QIP) issue.
The company’s board today approved a composite QIP issue up to Rs 600 crore, consisting of equity shares and non-convertible debentures (NCDs) with warrants. According to the company release, the two-pronged strategy would enable the company to derive maximum value from the fund raising process.
The equity is expected to be about Rs 100-150 crore and the NCD size would be Rs 200 crore. The NCD would have the option to subscribe for the convertible warrants into equity shares for an amount up to Rs 200 crore. The warrant holder would have the option to convert it into equity shares within a period of 3—5 years.
The issue price of equity shares and warrant would be determined in consultation with the merchant banker in accordance with the Securities and Exchange Board of India (Sebi) regulations, said the release.
The move would augment the long-term resources including working capital requirements of the company. Investments are lined up in development of iron ore, coking coal mine and non-coking coal mines.
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