Mumbai, June 24: Reliance Communications Ltd (R-Com) is set to raise around Rs 4,300 crore through share sale to institutional investors and a preferential allotment to promoters to pare debt.
The Anil D. Ambani-led telecom company today opened its qualified institutional placement (QIP) book that is expected to raise around Rs 3,000 crore.
A board meeting of the company held today also approved a proposal to issue preferential warrants that will be convertible into shares to the promoter group.
R-Com has said it will issue and allot up to 8.67 crore warrants to its promoters under preferential allotment, entitling them to the same amount of shares. This will fetch the company about Rs 1,300 crore.
In a communication to the stock exchanges, the company said the promoters would pay 50 per cent of the subscription amount on the date of allotment of the warrants and the balance would be paid by March 31, 2015. It said the promoter group entities would try to make the balance payment before the deadline.
Proceeds from the issue will be used to bring down the company’s debt, which is now at over Rs 40,177 crore.
The preferential issue will lead to higher promoter shareholding in the company. For the quarter ended March 31, 2014, promoters held around 67.80 per cent in R-Com.
With foreign institutional investors continuing to pour money into domestic equities, market circles expect positive response to the QIP issue.
The offer price of the QIP has been fixed at Rs 142.13 a share, which is a 5 per cent discount to the floor price of Rs 149.61, based on the formula prescribed by Sebi.
R-Com shares today rose 0.57 per cent to close at Rs 151.35 on the Bombay Stock Exchange.
R-Com has reported a nearly 49 per cent drop in consolidated net profit at Rs 156 crore in the fourth quarter ended March 31 against Rs 303 crore in the same period a year earlier.
However, revenues increased to Rs 5,405 crore during the quarter from Rs 5,130 crore in the same period of the previous year.