Storage cell major Eveready Industries India plans to raise Rs 100-120 crore in the current fiscal by issuing shares to qualified institutional investors, diluting up to 5 per cent equity of the company to pare high cost debt.
"We plan to raise Rs 100-120 crore. In the event of five per cent equity dilution in the company, promoter's stake could come down by 1-2 per cent," Eveready Industries Managing Director Amritangsu Khaitan said today.
The promoter group holds around 44 per cent stake in Eveready.
The part of the proceeds would be used to repay high cost debt to the tune of Rs 50-60 crore, which would lead to a substantial reduction of interest cost burden for the company in the next fiscal (2016-17), he said.
"After the reduction of high cost debts, our interest cost in the next financial year could come down," Khaitan said.
Other portion of the QIP proceeds would be utilised for capex requirements in lighting and battery business, he said.
"We are planning to set up an outsourcing facility for LED light business in India. We will also start manufacturing some battery components in-house, which we are importing now," Khaitan said.
Eveready imports LED lighting products from China.
Earlier today, the Board of Eveready approved raising upto Rs 150 crore though qualified institutional placement.
Eveready Industries was betting big on the LED lighting business, with 70 per cent growth outlook, Khaitan added.
Eveready today reported a 49.90 per cent jump in net profit at Rs 15.89 crore for the first quarter ended June 30, 2015, against Rs 10.6 crore for the corresponding period of the last fiscal.
Its net sales in the quarter under review stood at Rs 347.92 crore, up 7.55 per cent compared with Rs 323.48 crore in the same quarter a year ago.
In a separate filing, Eveready Industries said its Board has declared an interim dividend of Rs 1 per share.
