Calcutta, March 29: The promoters of Ispat Industries plan to increase their holding in the company to over 51 per cent.
At present, Pramod and Vinod K. Mittal hold 42.44 per cent in the company.
The companys shareholders today approved a Rs 509-crore preferential issue of convertible warrants to the promoters to raise their stake to 47.43 per cent.
The promoters plan to take it up to 51 per cent next year, Anil Sureka, director (finance) of Ispat Industries, said.
According to Sebi guideline, promoters/sponsors cannot increase their stake by more than 5 per cent a year.
The Mittal brothers are consolidating their holding at a time when the companys stock has been battered by the recent market crash.
However, they are subscribing to the shares at over 30 per cent premium to the closing price of Rs 32.45 on Friday.
The preferential allotment will partly fund the companys Rs 2,293-crore expansion plan.
In the pipeline are a one-million-tonne coke oven plant in joint venture with Stemcor, a pellet plant with an annual capacity of 4.5 million tonnes and a plan to increase the hot-rolled capacity to 3.6 million tonnes from 3 million tonnes.
Company managing director Vinod Mittal said Ispat aimed at a steel making capacity of 5 million tonnes.