Bata India Rights Oversubscribed

After having clocked one of the swiftest turnarounds in Indian corporate history, Bata India has managed a 3 per cent oversubscription for its Rs 77 crore rights issue.

The renunciation price of the rights issue has also shot up to a hefty Rs 16. The renunciation price for the 1:1 issue went up to as much as Rs 16 per share.

Having closed 1995 with a loss of Rs 42.16 crore, the company registered a cash profit of Rs 15 lakh in the first half and hopes to end the 1996 fiscal with a profit of Rs 2 crore.

The renunciation price is pretty high considering the current lull in the market where normally it does not rise above Rs 2 or Rs 3, said merchant banking sources.

 

The oversubscription reported only four days after the offer closed is an estimated amount and the company expects the extent of oversubscription to increase over the next few days, sources added.

After the actual percentage of oversubscription has been ascertained, the shoe major will allot additional equity shares the number of which will be made within the overall size of the issue.

Share allotment will be at the discretion of the companys board, in consultation with the Calcutta Stock Exchange.

The rights issue was offered as part of a major financial restructuring plan to reduce high cost borrowings and for augmenting its working capital requirement. On June 30,1996 Batas total borrowings amounted to Rs 95.3 crore a Rs 25 crore reduction compared to the figure in December 1995.

Indebtedness on account of creditors for goods and services amounted to Rs 66.4 crore, a reduction of Rs 14 crore compared to the figures reported in December 1995.

Advance from Bata (BN) BV, the parent shareholder which holds 51 per cent stake in Bata India was Rs 34.3 crore generated internally.