Bhushan Steel to raise Rs 475 cr through rights issue
Jan 08 2013 , New Delhi
"The rights issue will open in the third week of January. We are planning to raise Rs 475 crore through it," the company's Director (Finance) Nittin Johari told PTI.
The company intends to use the money to part-finance its expansion activities, particularly in Odisha, he added.
The city-based steel maker will be issuing one equity share at a price of Rs 335 for every 15 equity shares held by its existing shareholders through the issue.
Bhushan Steel currently has a production capacity of 2.5 MTPA (million tonnes per annum) and it produces secondary steel products like cold-rolled coils, galvanised coils, colour-coated coils, etc, from its three manufacturing facilities in Uttar Pradesh, Maharashtra and Odisha.
It may also retire part of its over Rs 22,000 crore debt through the fund raising.
A rights issue is a way through which a company sells new shares to existing shareholders to raise funds. The price at which the new shares are offered is usually at a discount to the current share price.
Last week, Bhushan Steel had sought its shareholders nod through postal ballot to raise up to USD 1 billion (over Rs 5,400 crore) through issue of fresh securities.
Post shareholders approval, it will decide the dates and mode to launch the fund raising through issue of fresh securities.
The company is also expanding its capacity further by a new 3 MTPA plant in Odisha.
As on September 30, the company had long-term borrowings of Rs 19,584.71 crore and short term borrowings of Rs 4,064.54 crore.
During the first half of the current fiscal, Bhushan Steel has reported a net profit of Rs 407.48 crore and net sales of Rs 5,395.55 crore.
Shares of the company were being traded at Rs 486.60 apiece on the BSE at 1355 hours, down 1.12 per cent from their previous close.