Ceat raises Rs 400 cr via QIP, to use funds for expansion

Tyre maker Ceat today said it has raised Rs 400 crore through a qualified institutional placement and the funds would be utilised for expansion.
The company will issue 44,94,382 equity shares at a price of Rs 890.00 per share, the company said in a statement.
The issue price translates to a discount of approximately 0.8 per cent on closing price on November 26, 2014, it added.
Ceat Managing Director Anant Goenka said: "The proceeds from the QIP is proposed to be used, inter alia, for capacity expansion at the Halol plant, two-wheeler tyres project etc. The projects are proposed to be funded through a mix of net proceeds from the issue, internal accruals and debt. The exact mix of the same is under evaluation."

The book running lead managers to the QIP are JM Financial Institutional Securities Ltd and Standard Chartered Securities (India) Ltd. Khaitan & Co has acted as domestic legal counsel to the issue and Dorsey & Whitney LLP acted at international legal counsel to the book running lead managers, the company said.
Ceat on November 24 opened its QIP and fixed the floor price at Rs 930.53 per equity share.

"The floor price in respect of the aforesaid QIP, based on the pricing formula as prescribed under Regulation 85(1) of the SEBI ICDR Regulations is Rs 930.53 per equity share," Ceat said in BSE filing.

Last month, the company said its Board of Directors have approved an investment of Rs 420 crore for setting up a plant for manufacture of 2-3 wheeler tyres with a capacity of 120 metric tonnes per day.
In same month, company has approved an investment of Rs 50 crore for implementing a project for manufacture of speciality tyres (which includes off- the-road tyres) through a subsidiary company.
Shares of Ceat closed at Rs 905.60 apiece, up 0.73 per cent from their previous close on BSE.