Birlas to raise stake by 11 per cent
The Birlas are set to raise their stake in Aditya Birla Nuvo by 11 per cent to 50 per cent through a proposed preferential allotment, reports Indulal PM.business Updated: Jan 09, 2008 23:09 IST
The Birlas are set to raise their stake in Aditya Birla Nuvo by 11 per cent to 50 per cent through a proposed preferential allotment. The Birlas would pump in Rs 4,200 crore to subscribe to 2.05 crore warrants — that can be converted into equity after 18 months — issued by Aditya Birla Nuvo. The warrants are issued at a price of Rs 2,000 per share, which is at a 15 per cent discount on the existing share price. The stock, however, has appreciated by almost 10 per cent to close at Rs 2,314 on Wednesday.
Aditya Birla Nuvo will use the money to fund the rapid expansion of its various businesses. It is the holding company for insurance, mutual fund, garments and cellular businesses.
"The promoters are pumping in more than Rs 4,000 crore. It shows their confidence in the company, which is expanding its various businesses," said Adesh Gupta, whole-time director, Aditya Birla Nuvo. The company has convened an EGM on February 6 to get approval from its shareholders.
Garments, carbon black and insurance would take a major slice of the proposed investments. The insurance business, for instance, is expanding its distribution network. Madura Garments is setting up new showrooms across the country.
This requires an investment of Rs 500 crore. One more plant is being set up at Patalganga for the carbon black project at an estimated investment of Rs 300 crore.