Denim fabric maker Nandan Denim Ltd (NDL) today said it will raise Rs 100 crore by issuance of convertible warrants on preferential basis to foreign investors to fund its expansion plan.
Nandan Denim Ltd said it will be issue 25 lakh fully convertible warrants each to Foreign Portfolio Investors (FPIs) -- LTS Investment Fund Ltd and LGOF Global Opportunities Ltd -- at Rs 200 each.
"The company is expected to raise Rs 100 crore from the warrants issued to fund its growth plans, investment in proposed subsidiary/ies, meet long term working capital requirement and improve capital structure, etc,"Nandan Denim Ltd said in a statement.
Nandan Denim Ltd said it has received shareholders approval for this at the Annual General Meeting held today.
LTS Investment Fund Ltd currently holds 11.64 lakh shares (2.42 per cent) which post issue will increase to 36.64 lakh shares (6.91 per cent).
"The warrant holders shall be entitled to convert the warrants into equal number of equity shares of face value of Rs 10 each, on receipt of entire amount in one or more tranches, within a period of 18 months from the date of the allotment," it added.
Nandan Denim Ltd CEO Deepak Chiripal said: "The company has the strategic vision of emerging as a global leader in the textile industry. To fast track this strategic vision, the company requires the infusion of the additional funds."
"The proceeds will be utilised to augment the networth and the capital base of the company required for its business growth, to infuse the funds to the existing or proposed subsidiaries, to meet the long term working capital requirement of the company, to improve the capital structure of the company and for general corporate purposes," he added.
This will be the second warrant issue by Nandan Denim Ltd. In September 2015, the company had issued 25 lakh convertible warrants to FII namely Polus Global Fund which has been converted in to equity shares at Rs 200 per share upon receipt of Rs 50 crore towards the consideration.
As of June 2016, FII & FPI held 11.02 per cent in the company while promoter group holding is 58.27 per cent.
"Post issue of the 50 lakh warrant, holding of FII & FPIs will increase to 19.70 per cent and promoter holding will come down at 52.78 per cent," the company said.
The company has also proposed to increase the aggregate limit for holding shares by the FIIs/ FPIs to 49 per cent from 24 per cent at present.
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