The country’s largest auto component maker Bharat Forge is set to raise around Rs 600 crore through a mix of equity, warrants and non-convertible debentures (NCDs) and foreign currency convertible bonds (FCCBs). The company will soon go in for a qualified institutional placement (QIP), through which it would dilute around 5% of the company’s expanded capital.

The maximum possible FDI inflow for the issue is Rs 570 crore, the company has informed the foreign investment promotion board (FIPB), the nodal body for clearing foreign investment proposals into India.

In the proposed QIP, Bharat Forge would offer warrants simultaneously with NCDs. The board of directors of the company had given approval for the QIP in January, 2010.

According to the company’s proposal with the FIPB, warrants may be exchanged with the equity shares of the company within 60 days of the issue. FDI into the sector is permitted upto 100% under the automatic route.

The FCCBs earlier issued by Bharat Forge are also due for redemption in the next few months. The current stock prices of the company are below their conversion prices. FCCBs are essentially bonds that allow a buyer to convert bonds into equity at maturity at a pre-determined market-linked price.

Bharat Forge has two of its FCCBs maturing in April 2010. One FCCB features an issue size of $43.5 million, which has a conversion price of Rs 336, while the other bond offering aggregates $60 million with a conversion of Rs 384. Bharat Forge’s current market price is around Rs 280 (average).

Bharat Forge has also forged a joint venture with French power equipment maker Alstom’s to invest Rs 490 crore in two joint ventures for setting up manufacturing facility in the country.

In a sign reflecting an uptick in the manufacturing sector, Bharat Forge has reported a rise of over 760% in its net profit to Rs 37.99 crore for the quarter ended December 31, 2009. Sales have increased at a more modest rate of just over 11%, to Rs 518.43 crore.

During the nine-month period between April-December 2009, net sales were Rs 1,327.33 crore and net profit was Rs 65.78 crore.