Mumbai, April 21: Zee Telefilms has raised $100 million through an issue of foreign currency convertible bonds, joining a growing breed of companies sourcing cheaper funds from overseas markets.

The core size of the issue was $100 million, including the green shoe option of $15 million. The television media major said the issue received an enthusiastic response from foreign investors.

A senior Zee official said, “We are encouraged with the market’s response to the transaction.”

Zee has issued bonds with a five-year tenure. Investors can convert the bonds into shares at around Rs 197.24 per share, which is a 35 per cent premium to Rs 146.10, the closing price on the Bombay Stock Exchange (BSE) on April 20.

Zee shares shed Rs 1.35 or 1 per cent on the BSE to close at Rs 144.60 on fears that the equity dilution could result in heavy selling. If the bonds are not converted into shares, they will be redeemed at 116.24 per cent at the end of five years. They carry an interest rate of 0.5 per cent per annum, giving a yield to maturity of 3.5 per cent.

Zee’s announcement comes a day after Tata Motors’ that it has successfully raised $400 million. Bharti raised $100 million from overseas markets two weeks ago.

Like Tata Motors, Zee’s bonds will also be listed on the Singapore Stock Exchange. Reliance Energy and Indian Hotels have tapped this mode.