Piramal Enterprises is planning to raise Rs 7,000 crore over the next few months, group chairman Ajay Piramal said on Wednesday. Close on the heels of announcing a nearly Rs 5,000-crore qualified institutional placement (QIP), Piramal said the company would look to raise Rs 2,000 crore through a rights issue. “We aim to utilise these funds for augmenting the company’s capital for the growth of its existing business verticals. Witnessing a strong demand from high quality investors, we are happy with the confidence reposed in Piramal Enterprises Limited,” Piramal said.
In a statement in relation to the QIP, PEL said the company has approved the conversion price of Rs 2,690 per equity share, against the floor price of Rs 2,688.35 determined as per the formula prescribed under Sebi regulations for the compulsory convertible debentures (CCD) allotted to eligible qualified institutional buyers (QIBs) in the issue. PEL will issue these CCDs with a face value of Rs 107,600 each, convertible into equity shares of face value Rs 2 each, with a maturity period of 18 months, with an option to the CCD holders to convert all or part of the CCDs held by them into equity shares at any time before the maturity date. Each CCD will be convertible into 40 equity shares. The issue is expected to close on October 25, 2017.
Kotak Mahindra Capital, Citigroup Global Markets India, Morgan Stanley India and Motilal Oswal Investment Advisors have been appointed to manage the QIP offering. Till September 2017, 18 companies had raised Rs 34,881.52 crore through QIPs. State Bank of India’s Rs 15,000-crore offer was the biggest QIP issue in 2017 so far. In fact, SBI’s was biggest such equity issuance in the country, the lender had issued around 52.21 crore new shares at a price of Rs 287.25. SBI came with the offer to augment its capital adequacy ratio and for general corporate purposes.
After SBI, Kotak Mahindra Bank’s offer was the biggest. The private lender had raised Rs 5,803 crore in May 2017. Kotak’s offer was to enable its founder Uday Kotak to bring down his personal stake RBI mandated levels. Yes Bank which had to scrap its QIP in September 2016, successfully raised Rs 4,906 crore in March 2017. Federal Bank, DCB Bank and United Bank of India were the other banks which raised money through QIPs in 2017. Hindalco, Brigade Enterprises, Delta Corp and Premier Explosives were some of the other companies which raised money through QIPs. Banks constituted 82% or Rs 28,716 of the Rs 34,881 crore raised through QIPs. According to market participants the need for Tier 1 capital and the necessity to meet Basel III requirements as the reasons for banks opting for QIPs. In 2009, 54 companies had raised Rs 34,675.75 crore, the highest amount ever raised through QIPs.