Sterlite Industries (India) Ltd, a subsidiary of London Stock Exchange-listed Vedanta Resources Plc, on Thursday said it raised $1.5 billion through an offer of American Depositary Shares (ADS) to fund its capex plans.
The issue, which opened on Thursday and was scheduled to end on July 21, closed on day one. Vedanta Resources chairman Anil Agarwal was reported as saying in London, ?We are raising about
Rs 7,000 crore through American Depository Receipts (ADRs) to mainly fund the power project. The issue is complete today.?
Although fund raising via ADRs by Indian companies has waned in recent years, Sterlite has been active in the segment, states an SMC Capitals report. The company had accessed the US market in 2007, too, with a $2.06-billion ADR issue. The two ADR issuances by Sterlite are the largest by any Indian company since 2004.
Parent company Vedanta participated in the latest offering by subscribing to ADS worth $500 million. Sterlite priced the over 123.45 million new equity shares offered to the public at $12.15 each, as approved by its board of directors on Thursday. Vedanta?s shareholding in Sterlite post-issue will drop to 57.5%, assuming no exercise of the over-allotment option. Vedanta currently holds 61.7% in the company.
Sterlite Industries shares on Thursday slipped 6.12% on concerns of equity dilution and closed at Rs 590.15 on the BSE. JP Morgan Securities and Morgan Stanley & Co acted as joint book runners for the offering. The company has granted them an over-allotment option equivalent to 15% of the offer size.
?We are delighted with the high quality of the investors, who have participated in this transaction. It is a validation of the strength of the company?s business, especially its Indian power projects,? said Agarwal in a statement.
Sterlite Industries operates in the copper, zinc, aluminium and lead segments. It is in the process of constructing a 2,400-mw power project worth Rs 8,200 crore in Jharsuguda, Orissa, for which subsidiary Sterlite Energy recently raised a term loan of Rs 6,150 crore through a consortium of 19 lenders, led by State Bank of India. As of March 31, Sterlite had assets worth $8,710 million.
Vedanta Resources last month raised $1.25 billion through the issue of convertible bonds to finance takeovers, expansion and boost ownership in subsidiaries. According to the company?s website, the Vedanta group?s capital requirements until 2012 are around $7.9 billion. Meanwhile, Agarwal on Thursday offered to buy the government?s residual equity in Balco and HZL.