Indal to raise Rs 100 cr NCD from HSBC

Indian Aluminium Company, an Aditya Birla group company, has decided to raise Rs 100 crore by issuing non-convertible debentures (NCDs) to the Hong Kong & Shanghai Banking Corporation (HSBC).

Sources close to the development said, "The company has signed a deal with HSBC to issue NCDs of Rs 100 crore, valid for five years. The funds will be utilised for Indal's expansion."

Indal has lined up a Rs 2,000 crore capital expenditure, which envisages expansion of its aluminium metal capacity to 1,00,000 tonne per annum and increasing the capacity of its alumina plant at Muri to 5,00,000 tonne per annum.

The power generating capacity will also be increased to 267.5 megawatts at Hirakud, along with enhancement of the special alumina chemicals capacity to 1,27,000 tonne per annum at Belgaum. Indal, also has a 55 per cent stake in Utkal Aluminium, has plans to invest Rs 5,000 crore over the next few years in the project.

Meanwhile, all the businesses of Indal, except its aluminium foils division at Kollur in Andhra Pradesh, are set to merge with Hindalco Industries - the flagship company of the Aditya Birla group. Hindalco holds a 97 per cent stake in Indal.

The Hindalco board has approved the scheme of arrangement and announced that shareholders of Indal would get one share of Hindalco for every seven shares held.

The face value of Indal shares will be reduced from Rs 10 a share to Rs 2. Hindalco will continue to maintain its holding in the demerged Indal.