Indian Hotels Company gains after pricing CCDs

Indian Hotels Company rose 2.22% to Rs 108 at 14:22 IST on BSE after the company said it will issue nine compulsorily convertible debentures for every 40 equity shares to raise up to Rs 1000 crore.

The company made the announcement after market hours on Tuesday, 24 June 2014.

Meanwhile, the BSE Sensex was down 56.97 points, or 0.22%, to 25,311.93.

On BSE, so far 4.53 lakh shares were traded in the counter, compared with an average volume of 2.41 lakh shares in the past one quarter.

The stock hit a high of Rs 109.75 so far during the day, which is also a record high for the counter. The stock hit a low of Rs 106.70 so far during the day. The stock hit a 52-week low of Rs 37.55 on 6 August 2013.

The stock had outperformed the market over the past one month till 24 June 2014, rising 17.78% compared with 2.74% rise in the Sensex. The scrip had also outperformed the market in past one quarter, rising 50.71% as against Sensex's 15.02% rise.

The mid-cap company has an equity capital of Rs 80.75 crore. Face value per share is Re 1.

Indian Hotels Company (IHCL) said the rights issue committee of the company has finalised the terms and conditions of the compulsory convertible debenture (CCDs) to be issued on rights basis and has decided on issue price of Rs 55 per CCD. The face value of each CCD has been fixed at Rs 55. The committee has also decided on the entitlement ratio of 9 CCDs for every 40 equity shares of the company, IHCL said.

As per the conversion ratio, each CCD of Rs 55 will be automatically and compulsorily converted into one equity share of Rs 1 each at a premium of Rs 54 after 18 months from the allotment of the CCDs. The company said no interest shall be paid and no redemption will be allowed on the unsecured CCDs.

The conversion price shall be adjusted for any bonus or rights issue made by IHCL prior to the conversion date so as to ensure that the benefit of the CCD holder in not prejudiced and remain the same as if the conversion of the CCD into the equity shares had been undertaken prior to such bonus or rights issue, IHCL said.

The CCDs shall be rated by a credit rating agency. The CCDs and the equity shares proposed to be issued shall be listed and admitted for trading on the BSE and the NSE subject to necessary approvals, the company said.

Indian Hotels Company reported a consolidated net loss of Rs 160.85 crore in Q4 March 2014, lower than net loss of Rs 389.16 crore in Q4 March 2013. Net sales rose 7.6% to Rs 1093.96 crore in Q4 March 2014 over Q4 March 2013.

Indian Hotels Company and its subsidiaries are collectively known as Taj Hotels Resorts and Palaces.

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