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Ceat, one of India’s leading tyre manufacturing companies, announced the closure of a qualified institution placement of equity shares to raise Rs 400 crore. The funds will be used for capacity expansion.
The company will issue 44,94,382 equity shares at a price of Rs 890 per equity share.
Anant Goenka, Managing Director, Ceat, said: “The proceeds from the QIP is proposed to be used, for capacity expansion at the Halol plant, two-wheeler tyres project etc. The projects are proposed to be funded through a mix of net proceeds from the issue, internal accruals and debt. The exact mix of the same is under evaluation.”
The Book Running Lead Managers to the QIP are JM Financial Institutional Securities Limited and Standard Chartered Securities (India) Limited. Khaitan & Co has acted as Domestic Legal Counsel to the Issue and Dorsey & Whitney LLP acted at International Legal Counsel to the Book Running Lead Managers.
Last month the company said it was planning to invest Rs 470 crore to enhance tyre manufacturing capacity. It said it investment Rs 420 crores for setting up a plant to manufacture 2-3 wheeler tyres with a capacity of 120 metric tonne (MT) per day.
In addition, Ceat is looking at investing Rs 50 crores for implementing a project for manufacture of specialty tyres (which includes off-the-road tyres) through a subsidiary company.
