Four companies line up rights issue worth Rs 800 cr

The four firms are awaiting approval of Sebi

As many as four firms, including private sector lender Lakshmi Vilas Bank and infrastructure major IL&FS Engineering and Construction Company have lined up rights issue worth more than Rs 800 crore.

Mirc Electronics, which sells the Onida brand of TVs and drug firm Neuland Laboratories also plan to raise funds by issuing equity shares to existing shareholders.

These four firms, which had filed their draft documents with Securities and Exchange Board of India (Sebi) this year, are awaiting market regulator's approval.

These companies are collectively planning to garner Rs up to 863 crore through rights issue.

In rights issue, shares are issued to the existing investors as per their holding at pre-determined price and ratio.

Lakshmi Vilas Bank is planning to raise up to Rs 505 crore, while IL&FS Engineering and Construction Company plans to raise Rs 300 crore. Mirc Electronics have plans for Rs 33 crore and Neuland Laboratories for Rs 25 crore.

Moreover, Sebi has approved the rights issue of Mukand, Wheels India, Easun Reyrolle and Denis Chem Lab since the beginning of the year. However, Polson Ltd withdrew their rights issue in January.

According to Prime Database, 2014 is likely to see little action on the rights front.

In 2013, companies had raked in Rs 4,101 crore through issuance of right shares to their existing shareholders as against Rs 7,295 crore raised in the preceding year, indicating a slump of 44 per cent.

By way of numbers, 2013 witnessed 12 companies using the rights route as compared to 17 firms in the preceding year.