RCom raises Rs 4,800 cr via biggest QIP to reduce debt

Tags: News
The promoters of Reliance Communications, the telecom arm of the Anil Ambani-led Reliance Group, have diluted around 7 per cent stake through fresh issue of equity in a qualified institutional placement (QIP) to raise Rs 4,800 crore, which will be used to pay off part of its Rs 40,000 crore debt.

“The fund raising will help the company reduce high-cost rupee debt, which has doubled in the last four years, and save close to Rs 800 crore in interest cost,” a person close to the development said.

The issue was lapped up by funds based in the US, Singapore and Hong Kong and other parts of Asia.

Post issue, the promoter shareholding will drop to 60 per cent from 67 per cent while foreign investors will hold 23 per cent.

This was the biggest QIP fund raising by a private company, the previous ones being a Rs 4,000 crore issue by the Adani group and a Rs 3,966 crore one by GMR.

The RCom issue was priced at Rs 142 a share, a 5 per cent discount to the Sebi-adjusted price of Rs 149.61. The promoters also subscribed to around 8.67 crore warrants worth Rs 1,300 crore. The company issued 40-43 crore fresh shares, including those to the promoters.

The promoter/prom­oter group entities will be required to pay 50 per cent of the subscription amount on the date of allotment of the warrants and the balance 50 per cent on or before March 31, 2015, the company said in a posting to the stock exchanges. RCom shares closed 0.03 per cent higher at Rs 151.40 a share on Wednesday.

The QIP issue received overwhelming response from ‘long-only’ investors in the US, West Asia and various parts of Asia, people close to the development told Financial Chronicle. The share sale received total bids worth Rs 12,000 crore, which increased the issue size by 60 per cent from a base of Rs 3,000 crore.

For the quarter ended March 31, RCom posted a 48.5 per cent drop in consolidated net profit at Rs 156 crore from a year earlier. Revenue increased 5.36 per cent to Rs 5,405 crore

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