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State Bank of India has got government approval to raise equity capital Rs 11,576 crore in equity capital. SBI said that it will raise Rs 2,000 crore by way of a preferential equity issue to the government, which is its main shareholder, and also raise Rs 9,576 through a qualified institutional placement. The government’s approval is subject to its stake in the company not falling below 58%, from the current level of 62.3%.
Aditya Birla-group metal firm Hindalco will raise Rs 2,900 crore through a qualified institutional placement route.
The company has determined the floor price for the share (face value: Re 1) at Rs 130.90 as prescribed by the SEBI formula.
The stock closed on the BSE at Rs 133.80 on November 23.
Earlier, Hindalco had increased the FII investment limit from 24% to 40%, and also raised the target amount from the QIP issue from Rs 2,400 crore to Rs 2,900 crore.
The stock price of battery manufacturer Exide Industries was holding up well on November 18, pretty close to its 52-week high of Rs 124.
But in the afternoon at around 1:30pm IST the Exide stock started sliding and closed the day 5% lower than its Tuesday’s close.
The reason? The market didn’t seem pleased with the news that the company would raise Rs 500-600 crore, by way of equity or convertibles, through a qualified institutional placement (QIP) to qualified institutional buyers.
Shopper’s Stop announced its plants to issue 40 lakh shares through a preferential issue to qualified institutional buyers. The Qualified Institutional Placement route has become a preferred means of raising funds for companies, as it is fast and there seem enough investor appetite for Indian equities. The company has not spelled out why it is raising this money, but it could be used for working capital purposes, reducing debt and funding its ongoing investment programme.
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.
Private sector bank Karnataka Bank will be issuing Rs 500 crore worth of equity shares through a qualified institutional placement. The issue will contribute towards its Tier I capital, in the computation of its capital adequacy ratio. Banks have to maintain a certain proportion of their capital to their assets (loans) known as capital adequacy ratio (CAR), a measure of their financial strength to meet contingencies. Karnataka Bank had a CAR of 13.54% as of March 31, 2009 as per Basel-I norms.