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Hindalco plans expansion by issuing Rs. 2500cr
 
Hindalco plans expansion by issuing Rs. 2500cr
The Aditya Birla Groups Hindalco Industries declared to raise around Rs. 2500 crore through the issue of shares on a right basis to fund more than Rs. 12,000 crore expansion plan in aluminium, on Tuesday.

The rights issue- the companys first equity offering in the domestic market since 1989- will be in the ratio of 1:4. According to this, a shareholder with four equity shares will be issued one equity share of the company. The rights issue will be priced at Rs. 107 per share with the face value of Re. 1. The shares of Hindalco rose by 0.66% on the BSE to close at Rs. 160.80 ahead of the announcement on Tuesday. The rights issue, if fully subscribed by all share-holders, will not lead to any change in the shareholding pattern. The price of Rs. 107 is at a considerable discount compared to Hindalcos market price of Rs. 160.80 per share. The promoters, who now own about 26% in the company, will have to invest Rs. 650 crore to maintain their stake at the current levels in the expanded equity base.

Kumar Mangalam Birla, Chairman of Hindalco Industries, said that the company is on the threshold of its next phase of growth, and the planned expansion would transform the company to a global scale metal producer.

The funds raised through the rights issue would be used for financing various projects under implementation by the company. The cost of these projects is estimated to be over Rs. 12,000 crore. The companys equity capital after the rights issue will rise to Rs. 115.9 crore from Rs. 92.8 crore.
Posted On : 9/21/2005 5:34:52 PM

 
 
 
Hindalco plans expansion by issuing Rs. 2500cr