JM Financial has received the mandate to handle the Rs 189-crore rights offering. The company has filed the letter of offer with the Securities & Exchange Board of India (Sebi) for clearance, ACC sources said.

The rights issue is critical for ACC to meet its investment plans after having worked out a Rs 750-crore capex for hiking its cement capacity to 15 million tonnes from 12 million tonnes over the next 30 months.

"We plan to complete the rights issue in June," said top company sources. The equity float will expand the equity base of ACC by 25 per cent, from Rs 137.57 crore to Rs 171.96 crore.

The offering, under which shareholders will be offered one equity share for every four shares held, will carry a premium of Rs 45 per share. The offer price, fixed at Rs 55 pershare for a Rs 10 share, represents a discount of around 60 per cent to the prevailing market price. On the present face value of Rs 100 per share, the equivalent issue price works out to Rs 550 per share.

The company has received shareholder approval to break up the face value of equity shares to Rs 10 per share from Rs 100 a share.

The ACC board had earlier decided to mop up Rs 100 crore through a preferential allotment of 90 lakh warrants and/or equity shares to the existing promoters - the Tata group. The proposal, which would have hiked the Tata stake to around 17.83 per cent in the cement major, was spiked by the financial institutions led by IDBI.

The company had initially planned the rights issue and the preferential allotment to fund a proposed acquisition of Tata Steel's cement division. French cement major Lafarge had in the last round of bidding pipped ACC to the post with a revised bid, which was about 20 per cent higher.

After the failure to acquire the division, ACC will now increaseits capacity through debottlenecking of some of its plants and a brownfield expansion.