Hindalco Industries, India’s largest aluminium maker, plans to raise about Rs 2,900 crore in the next three to four weeks. In July, it had announced plans to raise Rs 2,400 crore through Qualified Institutional Placement (QIP). The issue could not take place due to the volatility in the stock markets.
Later, the company revised its plan, increasing the limit to Rs 2,900 crore, but it did not finalise any schedule. Starting this week, the company is on a road show for the QIP, said a banker involved with the issue.
“They have started road shows in India. The plan is to then have road shows in the US, the UK, Hong Kong and Singapore,” he said. The road shows, basically meetings with potential investors, are expected to get over by November 20.
The company has a Rs 23,000 crore capital expenditure plan for the next three years. About a third of this, around Rs 7,500 crore, is to be funded by equity infusion and internal accrual.
The capital expenditure involves ongoing projects such as production of alumina from the Utkal Alumina refinery, scheduled to start around July 2011. The construction of a 1.5 million tonnes per annum project at Rayagada, Orissa, is also in full swing. The Mahan Aluminium project in Madhya Pradesh, with capacity production of 359,000 tonnes per annum, is also expected to start production by July 2011.
Besides, a captive power plant of 900 Mw is also coming up at Bargwan in Chhattisgarh.
“Depending on the response from the investors, the company is looking for raising Rs 2,400 crore to Rs 2,900 crore,” he said.
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UBS, ICICI Bank, SBI Capital Markets, Royal Bank of Scotland, Citigroup Global Markets, and Deutsche Bank are bankers to the issue.
Hindalco stocks closed at Rs 129.5 a share on the Bombay Stock Exchange on Monday, three per cent higher than the previous day’s closing. The Sensex, the benchmark index of the exchange, closed 2.1 per cent higher, to 16,498 on the day.