Non-banking finance company Cholamandalam DBS Finance today said its Board has approved sale of nearly 10 per cent stake to IFC, the investment arm of World Bank, for about Rs 100 crore to fund growth and capital adequacy requirements.
The company said in a release that it would issue 1,08,93,852 fresh shares at a price of Rs 92 per share.
The proposal is subject to the approval of the Board of IFC, besides shareholders of Cholamandalam DBS, it said.
The company had earlier allotted 3,00,00,000 Fully Convertible Cumulative Preference Shares (FCCPs) of Rs 100 each aggregating to Rs 300 crore in March 2009 and the said FCCPs are due to be converted before September 2010.
Post capital infusion by IFC and also the conversion of preference shares, the net worth of the company would be close Rs 900 crore and the promoters would continue to hold 74.9 per cent in the equity capital of the company, the release added.
Cholamandalam is part of the $three billion Murugappa Group.