Opto Circuits India has taken enabling approval from its board of directors for raising Rs 400 crore under a qualified institutional placement. The company, which makes medical equipment and electronic components, has also taken approval for an issue of warrants to its promoters. It can issue 60 lakh equity warrants to promoters, directors and employees on a preferential basis. Each warrant will fetch one equity share at a price of Rs 210 compared to the current price of Rs 186. Promoters are in a rush to get warrant issues approved.
A promoter’s stake falls when a QIP issue is made. Warrants allow them to hike their stake in a company gradually, even as the conversion price remains fixed. But Sebi has made it tougher for promoters to subscribe to warrants, by keeping the upfront margin payable at 25% of the conversion price. So, in this case, the promoters will have to pay Rs 52.50 as margin money per share. If all the 60 lakh warrants are converted, the company will get Rs 126 crore from the issue, including Rs 31.5 crore as upfront margin money.
The company, which had consolidated revenues of Rs 468 crore in 2007-08, has seen its interest costs shoot up in the current year. It has a Rs 204 crore loan taken for the acquisition of Criticare in the