After Ratan Tata and Mukesh Ambani, it is Kumar Mangalam Birla's turn to raise stake in his flagship company Hindalco Industries. |
The company announced that its board would meet tomorrow to consider a preferential issue of equity and equity-linked instruments. |
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Although it did not mention to whom the preferential issue would be made, market sources said Birla and his investment companies would subscribe to the offer. |
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Industry sources said while Birla would scale up his stake from 26.79 per cent, the company would improve its debt-equity ratio through the offer. |
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Hindalco's debt is expected to go up after the acquisition of Atlanta-based aluminium downstream company Novelis for an enterprise value of $6 billion (Rs 27,000 crore). |
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They added that Birla might scale up his holding by 5 per cent, the maximum permissible limit under Indian law. In case, he wants to increase his holding by 5 per cent, he will have to subscribe to 86.1 million equity shares. |
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At the ruling market price of Rs 140, these shares will cost him Rs 1,200 crore. If he intends to increase his stake by 4 per cent, he will have to chip in Rs 950 crore for subscription of 68 million shares. |
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Analysts said Indian promoters had been scaling up their stakes to take their companies beyond the reach of predators. |
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Last year, the Tatas had raised their stake in Tata Steel by 3 per cent to 30 per cent. |
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Reliance Industries Chairman Mukesh Ambani recently announced infusion of Rs 16,000 crore to scale up his holding by 4 per cent to 55 per cent. |
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