REL raises $178m via zero-coupon FCCB

Reliance Energy, the power arm of India's largest corporate house , today raised $178 million through the country's first zero-coupon foreign currency convertible bond (FCCB) issue.

These are convertible into GDRs at Rs 1,007 per share, representing a 30 per cent premium over the closing stock price of Rs 775 per share today. The company has with this raised around Rs 3300 crore over the last one week.

The offering was oversubscribed with bids to the tune of $3.3 billion being received from over 200 institutional investors across the US, Asia and Europe.

Deutsche Bank was the sole lead manager to the FCCB issue.

"This is the largest ever convertible bond offering from the country and reflects the confidence of international investors in Reliance Energy's growth prospects," sources familiar with the development said.

Reliance Energy was known as BSES till last week when the re-christening took place and a new logo was unveiled.

On February 22, the company announced plans to raise Rs 3,000 crore.

This comprised preferential allotment of Rs 1,400 crore (at Rs 640 per share) to the promoters of the company and another Rs 600 crore preferential allotment to the Life Insurance Corporation and the General Insurance Corporation.

LIC and the GIC. The balance Rs 1,000 crore was to be raised through a mix of normal equity shares and shares carrying differential voting rights on which the company proposed to pay 5 per cent higher dividend than those paid to equity shareholders and FCCBs.

The issue of shares with differential voting rights are subject to the requisite approvals.

Subsequently, two FIIs "" Capital International and Sloan Robinson "" pumped in around Rs 358 crore by buying around 56 lakh shares in the company. The exact mix at which Rs 3,300 crore has been raised could not be ascertained.