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IL&FS Transportation Networks Ltd has sought capital market regulator Securities and Exchange Board of India (Sebi)'s approval to raise up to Rs 525 crore through a rights issue, draft letter filed by the company with Sebi showed.
In a rights issue, shares are issued to existing investors as per their holding at pre-determined price and ratio. The city-based firm, the largest owner of BOT roads, plans to use the proceeds of the issue for repayment of loan amount and other general corporate purposes.
“Our company proposes to utilise an estimated amount of Rs 500 crore from the net proceeds towards repayment, in full or part, of certain loans availed by our company,” IL&FS Transportation, which is a subsidiary of Infrastructure Leasing and Financial Services Limited (IL&FS), said in the draft letter.
“We believe reducing our indebtedness will result in an enhanced equity base, assist us in maintaining a favourable debt-equity ratio in the near future and enable utilisation of our accruals for further investment in business growth and expansion,” it noted.
Axis Capital, CLSA India, SBI Capital Markets and IL&FS Capital Advisors are acting as lead mangers to the proposed issue. Earlier in September, the company's board had approved the proposal for issue of equity shares of the face value of Rs 10 each to the existing shareholders of the company on a rights basis.
