After the FMCG business of Zandu Pharmaceuticals was demerged into Emami Ltd on June 19, the Kolkata-based FMCG major is opting for the QIP (qualified institutional placements) route to raise funds.
With the stock market buoyant?though the Sensex closed 291 points in the red on Tuesday pulled down by the realty index?many companies have been raising funds by offering shares to qualified institutional buyers rather than IPOs or rights issues.
Though no one in the company or analysts would say how much Emami Ltd hopes to raise through QIPs ?it?s too early to make that call,? said director Mohan Goenka?the company is offering a crore of shares which constitute 15% of post issue capital. Emami Ltd has 6.2 crore shares in all. The floor price is Rs 276.67 per equity share of face value of Rs 2 each. On the BSE, Emami closed at Rs 365 on the BSE on Tuesday, marginally up 0.01% from Monday?s close. Sources said the company is hoping to raise Rs 250-300 crore with this exercise.
Analysts said FMCG companies have been registering better growth and were likely to benefit from a rising market. Last November, the Rs 1,600 crore Emami Group brought over Zandu Pharmaceuticals for Rs 700 crore; and has just finished restructuring the business by merging Zandu?s FMCG with Emami Ltd.
On June 19, the company also demerged Emami Realty and Emami?s interests in Zandu?s non-core business including real estate into a separate company, Slick Properties Private Limited (SPL). For this purpose, SPL was converted into a public limited company and will subsequently file application for a change of name to Emami Infrastructure Ltd.
With the funds raised from QIBs, Emami Ltd, with total income of Rs 621 crore as of March 31, 2008, hopes to accelerate growth, fund expansion plans, repay debt and finance other investment opportunities.