Sebi clears Deccan Gold's rights issue plan

Company to raise Rs 44 crore through the rights issue

Mineral exploration firm Deccan Gold Mines has received market regulator Sebi's approval to raise a little over Rs 44 crore through a rights issue.

With this, the number of firms that have got the capital market watchdog's nod for a rights issue since the beginning of the year has gone up to seven.

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

Deccan Gold, in March, had filed draft papers with Sebi through its lead merchant banker, SPA Capital Advisors.

The Securities and Exchange Board of India (Sebi) issued its final observations on the draft offer documents on July 17, which is necessary for any company to go-ahead with a rights issue.

According to draft papers, the company would issue nearly 3 crore shares of face value of Rs 1 "for an aggregate amount of Rs 444.14 million to the eligible shareholders on rights basis".

"The issue price is 15 times the face value of the equity shares," the company said in the document.

Deccan Gold has proposed to issue the shares in ratio of one equity share for every two equity shares held by the investors of the company.

The funds raised from the issue would be used for investment in Deccan Exploration Services Ltd -- an arm of Deccan Gold -- as well as other general corporate purposes.

Deccan Gold is into mineral exploration focused on making discoveries of gold deposits that are suitable for commercial operations.

Apart from Deccan Gold Mines, other firms that have got Sebi's approval are -- State Bank of Travancore, Zee Media Corporation, Vascon Engineers, Wintac, Everlon Synthetics and Polson.