Hindalco Industries, India's largest aluminium maker, has said that it will raise Rs 5, 000 crore ($1.2 billion) selling rights shares in a bid to partly repay loans it took to acquire a Canadian company, Novelis, last year.

The city-based company will sell three new shares to stakeholders for each held, Hindalco told reporters. The price of the rights shares will be decided by the company later.

"The aim is to avoid the foreign currency mismatch," said Sunirmal Talukdar, executive president and chief financial officer of the company hinting on higher probability of raising international debt.

Hindalco is seeking to raise money from stakeholders at a time when companies, including Jet Airways and Union Bank of India, have either deferred sales or the promoters had to salvage the issue by investing their own money.

The metal maker's shares fell by 6.37 per cent to Rs 161 on Friday on the Bombay Stock Exchange (BSE). The 30-share BSE barometer, Sensex, fell by 3.42 per cent to 14,571.29 points.

Hindalco acquired Novelis, a downstream aluminium company, for $6 billion for which it took a short term loan of $3.03 billion. The loan matures on November 10 this year and the company needs to raise funds to repay the loans.

The Aditya Birla group firm may borrow long-term funds from overseas or sell debt to raise the balance $2 billion. It will also use its own cash to repay a part of the loan.