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Home / Business / Kesoram Industries Ltd to launch Rs 400 crore rights issue

Kesoram Industries Ltd to launch Rs 400 crore rights issue

The company board, which met on Monday, approved the issue whereby shareholders will be offered 133 shares for every 274 held in the company as on September 17
Representational image.
Representational image.
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Our Special Correspondent   |   Calcutta   |   Published 14.09.21, 02:13 AM

Kesoram Industries Ltd will launch its Rs 400 crore rights issue on September 27 and allow eligible shareholders to participate in the share sale for two weeks.

The board of the company, which met on Monday, approved the issue whereby shareholders will be offered 133 shares for every 274 held in the company as on September 17.

Cement producer Kesoram will issue close to 8 crore fresh shares priced at Rs 50 a piece. The payment for the rights will be made in two parts of Rs 25 each. The first and final call will be made within a period of 6 months from the date of allotment of rights equity shares.

The issue price is going to be attractive compared to the prevailing market price of Kesoram. The stock closed at Rs 86.05, up by 3.12 per cent or Rs 2.6 a piece, offering 41 per cent discount to the Monday’s closing price.

Manjushree Khaitan led Kesoram is raising equity in order to bring down high cost debt which carries a crushing interest rate of close to 20 per cent.

It had earlier planned to launch a preferential issue to a section of the promoters prior to the rights issue. However, the plan was scrapped while a cross section of shareholders, including promoter group entities, wanted to participate in the fundraising plan.

Accordingly, the Kesoram board announced a rights issue but doubled the size of the fund raising to Rs 400 crore in an attempt to deleverage the balance sheet faster.

Electrosteel merger

Equity shareholders, secured and unsecured creditors of ductile iron pipe maker Electrosteel Castings Ltd approved the scheme for merger of Shreekalahasti Pipes Ltd with the company by way of requisite majority on September 10.

The creditors and shareholders of SPL, also a ductile iron pipe maker based in south India, had previously approved the merger with ECL, which has a plant in Khardah near Calcutta.

The companies will now await formal approvals from the respective benches of the National Company Law Tribunal before completing the merger. SPL, promoted by ECL promoter Kejriwal family, will consolidate ECL’s business in the fast growing DI pipe market in India.



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