Orchid raises $75 mn via GDRs, FCCBs

Orchid Chemicals and Pharmaceuticals has raised $75 million (about Rs 340 crore) through a combination of global depository receipts (GDRs) and foreign currency convertible bonds (FCCBs). The instruments used by Orchid and the extent of money raised has been influenced by the current spell of weakness in the stock market.

The company had originally planned to raise $100 million through GDRs. An Orchid spokesperson said that given the current market condition, the valuation for the underlying shares could not have been good.

The GDR and FCCB combination leaves the company with headroom to raise more capital abroad in future. Orchid has raised $37.5 million each from GDRs and FCCBs. Each GDR represented one underlying share and was priced at Rs 195 each, with a discount of 6.69 per cent to Orchid's closing share price of Rs 208.55 on BSE .

The zero-coupon FCCB has a life of five years and will be converted at a premium of 25 per cent to the GDR price at the end of it.

About 50 per cent of the money raised through GDRs and FCCBs will be used to retire some of the debt on the company's books, while the balance will be used for new product development, said the spokesperson.

The GDRs and FCCBs will be listed in Luxembourg Stock Exchange. Citigroup acted as the sole book-runner and lead manager for the transaction.