Piramal Enterprises on Monday said it would raise Rs 1,750 crore through an issue of compulsorily convertible debentures, convertible into equity shares of face value of `2 each, by way of preferential issue.
The proposal was approved at the company’s extraordinary general meeting (EGM) on Monday.
Following a liquidity crisis that emerged in the bond markets after defaults by entities from the Infrastructure Leasing & Financial Services (IL&FS) group, Piramal Enterprises has found it difficult to raise funds at fine rates from the domestic market.
In October, FE had reported that two subsidiaries of Piramal Enterprises were looking to raise over Rs 2,372 crore by issuing the country’s first asset backed securities, where the underlying asset will be wholesale loans to real estate developers. The two subsidiaries are Piramal Capital and Housing Finance (PCHFL) and PHL Fininvest and they raised this amount by securitising a pool of wholesale real estate loans.
Earlier, in June this year, Piramal Enterprises sold all of its direct investment in Shriram Transport Finance Company to third-party investors.
Piramal Enterprises did not state the price at which the sale was done but said it had sold its 9.96% stake.
Piramal had bought its near-10% stake in Shriram Transport Finance in May 2013 for a total consideration of Rs 1,652 crore. The stake purchase had followed Piramal’s announcement of its foray into the financial services business.