Indo-Gulf Fcd Placed Privately
Indo Gulf Fertilisers has completed the private placement of Rs 105 cr of fully convertible debentures. According to sources at the A V Birla Group, the issue was closed yesterday.
The company has raised the money to part-finance the expansion of capacity at the greenfield copper project, Birla Copper at Dahej in Gujarat. The FCD will get converted into one equity share of the company on maturity after 17 months and 29 days. This implies that the company did not have to seek any mandatory credit rating requirement.
The FCDs offer a coupon of 14.25 per cent on a semi-annual basis. Institutional sources said that UTI, ICICI and IDBI were the financial institutions subscribed for the private placement issue. The issue was lead managed by UTI Securities Exchange Ltd.
"The conversion price will be at a 20 per cent discount to the prevailing market price. There will be a ceiling of Rs 55 on the conversion price. The par value of the FCD has been fixed at Rs 37.80," sources said.
The company will use these proceeds to bridge the funding gap for the copper plant. Earlier in the year, the company decided to raise Rs 300 cr to finance the expansion of the capacity for Birla Copper from 100,000 tpa to 150,000 tpa.
The maturity of the convertible debenture is of 17 months and 29 days. This has been done to ensure that there is no need to seek any credit rating under Sebi Regulations.
"The number of shares issued will be decided on the price at which conversion takes place. At a price of Rs 37.80, 2.77 million shares would be issued while at a price of Rs 55, the number will be half of that," a source said.
The 14.25 per cent interest rate is with respect to a price of Rs 37.80. "Institutions stand to make smart gains at this price. The fair value of the stock is pegged at Rs 50," an analyst at an institutional brokerage said.
The company has raised the money required to fund the expansion through a preferential issue a month back. The company also placed non-convertible debentures with leading banks and institutions.
They have decided to fund the plan. They planned to go for Rs 300 cr equity issue. They raised Rs 105 cr through FCD. The gap with preference share issue about a month back and NCDs with banks and issues.
The stock closed on the BSE at Rs 30.65 on the BSE and Rs 30.50 on the NSE.