India Inc's fund raising spree continues

The promoters of Suzlon Energy Ltd. sold 70mn shares, or approximately 4.5% of the paid-up share capital of the company at Rs96.85 a share. That was a 45% discount to the closing price on Sept. 22. Post the sale, the total promoter group shareholding in Suzlon stands at about 53.08%. The Tanti family raised Rs6.78bn from the sale of shares. Speaking on behalf of the promoter group, Tulsi Tanti stated: "The proceeds raised through the sale of minor stake are intended to be used primarily to infuse funds into the Company as unsecured debt or equity, subject to applicable law, company and requisite approvals. The money thus infused is expected to be used for working capital and other funding requirements of the company."

Sesa Goa Ltd. announced the final terms of the previously announced launch of an offering of Foreign Currency Convertible Bonds (FCCBs). The size of the offering is US$500mn. The FCCBs will have a coupon of 5% per annum, payable semi-annually in arrear and will be convertible into equity shares of the company. The conversion price has been set at Rs346.88 per share, representing a premium of 28% to the reference price of Rs271 per share. Proceeds from the offering will be used to expand the company's mining operations, for exploration for new resources, and to further develop its pig iron and metallurgical coke operations, Sesa Goa said. Use of proceeds will be in accordance with end-use restrictions specified in the External Commercial Borrowing (ECB) regulations issued by the Reserve Bank of India (RBI), it added.

Jaiprakash Associates Ltd. raised Rs11.9bn from the sale of treasury shares. Jaiprakash sold 50mn shares at Rs238.46 apiece. The company could use the proceeds to finance its proposed captive power plants and keep cash ready for a possible acquisition or setting up of cement capacity in Maharashtra and overseas. Jaiprakash Associates executive chairman Manoj Gaur said that the funds will not be used for debt repayment. JAL has a total debt of Rs95bn and a debt-equity ratio of 1:9 now. This is the second tranche of treasury share sale by Jaiprakash Associates, which sold 25mn shares in June to raise Rs5bn.

Cipla raised US$140mn (nearly Rs6.76bn) through a qualified institutional placement (QIP) of shares to fund expansion and retire debt. According to reports, the company said that it would require capital expenditure of around Rs6bn this financial year and the company’s debt stands at Rs9.4bn. Around Rs9.2bn of debt is repayable this year. The company offered to sell shares worth US$110mn, with an option to raise it to US$175mn. The shares were sold an average price of Rs263.75 a piece, resulting in an equity dilution of around 4%.

3i Infotech raised Rs3.18bn through the qualified institutional placement (QIP) route. The QIP issue, which opened on September 17, closed on Sept. 22. The company will issue 37.5mn shares at a price of Rs84.75 a share to the buyers. 3i Infotech had earlier passed an enabling resolution to raise up to Rs5bn in July. "The issue size is relative to the demand and other QIPs in the market at that time, apart from their pricing. Based on all these factors, we decided that raising US$50-65mn would be optimal," said Amar Chintopanth, CFO, 3i Infotech. The funds raised will be used to partially retire the company’s debt.