CIFCL Plans Rs 30-cr Rights Issue In April

Chennai, January 21: | Updated: Jan 22 2003, 05:30am hrs
Cholamandalam Investment and Finance Company Ltd (CIFCL), the Murugappa group promoted non-banking finance company, is planning to come out with a rights issue of shares for Rs 29.52 crore in April 2003. The rights shares are being offered at a premium of Rs 25 per share and in the ratio of 1:2. It has appointed ICICI Securities and Finance Company Ltd as the lead managers for the issue.

The funds to be raised through the issue will be used for future growth of the company. Cholamandalam has seen good business over the past three years and we are expecting the growth momentum to continue in the future. The capital infusion will also help us to boost our capital adequacy ratio (CAR), Mr M Anandan, managing director, CIFCL, told FE.

As of September 2002, the CAR of the company is 12.33 per cent. After the rights issue, the net worth of the company would touch Rs 235 crore (including a preference share capital of Rs 35 crore). As of September 2002, the net worth of CIFCL stood at Rs 170.63 crore.

He said, board of CIFCL had approved the proposal sometime in October last. And subsequently, offer document was prepared and a draft paper was filed with the Securities Exchange Board of India (Sebi) recently for approval. The approval of the market regulator is awaited. And we are hopeful of coming out with the issue sometime in April, he added.

According to the offer document filed with Sebi, The issue proceeds will be utilised to improve the financial position of the company by augmenting the equity share capital. It will also be used to fund growth in NBFC and other related business.

Among other things, promoters group hold 49.09 per cent; public 38.50 per cent; private corporate bodies 4.16; and NRIs 2.75, among others.