Cholamandalam DBS Finance plans to issue preference shares to its promoters to raise Rs 300 crore capital. The preference shares will be issued at a price of Rs 300, 7.5 times higher than the current equity share price of Rs 40.5.
The company will seek share shareholders approval to issue one crore zero coupon fully convertible preference shares of Rs 100 with a premium of Rs 200 to Tube Investments of India, EID Parry (India), Coromandel Fertilisers, Carborundum Universal and DBS Bank.
The preference shares will be convertible into equity shares within a tenor of 18 months from the date of allotment, the company said in a communication to the Bombay Stock Exchange (BSE).
However, the non-banking finance company did not give a conversion price. The share price of the Cholamandalam DBS Finance was up by 8.7 per cent today at Rs 40.50 on the BSE.