Ashok Leyland raises Rs 667 crore via QIP

It is a move that would help the company improve its financial position

Hinduja Group flagship company Ashok Leyland has raised Rs 667 crore via qualified institutions placement (QIP), a move that would help the company improve its financial position.

The capital raising comes on the back of a strong operating margin performance in Q4 - reflecting cost reduction and margin improvement measures, as well as the expectation of a turnaround in the domestic commercial vehicle market, Ashok Leyland said in a statement.

The QIP, launched on June 26, attracted a very favourable response from institutional investors across geographies, it added.

"The issue was subscribed by foreign institutional investors, mutual funds and qualified institutional buyers (QIB) amongst others. The issuance will help improve the debt and the financial position of Ashok Leyland," Ashok Leyland Chief Financial Officer Gopal Mahadevan said.

The Chennai-based firm allotted 1,852 lakh shares to eligible qualified institutional buyers at an issue price of Rs 36 per share (face value of Re 1 and a premium of Rs 35 per equity share), a premium of 5 per cent to the SEBI floor price, aggregating around Rs 667 crore.

Ashok Leyland shares were trading at Rs 33.05 apiece on the BSE, down 6.11 per cent from its previous close.