Hinduja Finance To Raise Fii Holdings

Hinduja Finance Corporation, which is emerging as the holding firm for the group's investments in the information technology, communications and entertainment sectors, plans to hike the foreign institutional investors' stake in the company to 40 per cent.

At present, FIIs hold only about 1.71 per cent of the stake. Hinduja Finance will seek shareholders' nod for the move at its annual general meeting on May 24. The company has stated in the notice that 40 per cent of the paid-up capital can be held by FIIs, provided the move is approved by way of a special resolution. The firm has introduced this as a special resolution.

 

Hinduja Finance's attempt to hike the stake comes close on the heels of the government's decision to allow FIIs to hike their stake in the firms from 30 per cent to 40 per cent . This was allowed in this year's budget, subject to the 10 per cent ceiling for individual FIIs.

Hinduja Finance is also seeking shareholders' nod for floating either an American depository receipts (ADR) or global depository receipts (GDR). This is part of the company's move to become a major player in the technology, media and telecom sectors. It may issue ADRs or GDRs to finance expansion plans in these sectors, besides general corporate purposes.

The company is also planning to change its capital structure. Currently, the firm has an authorised capital of Rs 70 crore. This consists of 2.95 crore equity shares of Rs 10 each, 10.5 lakh convertible preference shares of Rs 100 each and 309 lakh redeemable preference shares of Rs 100 each.

The finance company now proposes to convert these into five crore equity shares of Rs 10 each and two crore unclassified shares of Rs 10 each. This is being done to enable the company to issue fresh shares to finance its acquisitions in the technology, media and telecom sectors.