 "RCom raises Rs 6,100 crore")
Besides the QIP, promoters of the company will invest Rs 1,300 crore to buy preferential shares at a five per cent premium to the QIP offer price. Currently, RCom’s promoters have 68 per cent stake in the company. RCom’s total equity proceeds will be Rs 6,100 crore.
The QIP, which opened Tuesday night, is the largest equity issue since the Narendra Modi-led government took charge at the Centre. It is also the single-largest QIP by a private Indian company, excluding banking entities.
| HERE COMES THE MOOLAH |
| Rs 4,800 CRORE FROM QIP Rs 1,300 CRORE FROM PROMOTERS Rs 6,100 CRORE TOTAL PROCEEDS FROM THE ISSUE Rs 12,000 CRORE TOTAL BIDS RECEIVED Rs 40,177.60 CRORE TOTAL DEBT Rs 800 CRORE ESTIMATED ANNUAL INTEREST SAVINGS AFTER RETIREMENT OF DEBT POST ISSUE Source: market insiders |
RCom’s qualified institutional placement (QIP), initially aimed at raising Rs 3,000 crore, was priced at Rs 142.2 a share, a six per cent discount to the company stock’s closing price of Rs 151.4 on Tuesday.
Sources said the company had received bids worth Rs 12,000 crore, with a strong response from investors in the US and Asia.
In a stock filing on Tuesday, the Anil Ambani-led telecom company had said the proceeds would be “used primarily for repayment of debt and de-leveraging the balance sheet of the company”. As of March-end, RCom had net debt of Rs 40,177.6 crore; analysts have often cited high debt as a key concern for the company. The debt is about five times its operating profit. Analysts said after RCom retired part of its debt from the issue proceeds, its annual interest-cost savings would be about Rs 800 crore. Anil Ambani’s Reliance Capital also plans to raise funds through the QIP route and has sought shareholder approval for this.
About two weeks ago, Idea Cellular had raised Rs 3,000 crore through a QIP and had undertaken a private placement to raise Rs 750 crore from Axiata, an existing shareholder. The fund-raising was aimed at funding the purchase of fresh spectrum for nine telecom circles for which its licences are set to expire in 2015-16. Auction of the spectrum is expected later this year.
On Wednesday, the RCom stock closed at Rs 151.4 on the BSE, up 0.03 per cent.