Marico raises Rs 1.5 bn via QIP
This QIP will be increasing Marico?s equity share capital to Rs 609 million, an increase of nearly five per cent.india Updated: Dec 04, 2006 19:57 IST
Marico Limited (Marico), the Indian FMCG major, has priced its offering of 29 lakh fresh equity shares on a private placement, at Rs 522 per share, thus raising about Rs 1.5 billion, through the Qualified Institutional Placement (QIP) route recently enabled by SEBI.
Marico is the first FMCG Company to raise equity through the QIP route. The issue which opened on November 30 and soon closed on December 1, saw a significant oversubscription of about 3.4 times - against the issue size of Rs 1.5 billion, the demand for shares was about Rs 5.1 billion.
The issue at Rs 522 per share was at a premium to the floor price determined under the SEBI formula (Rs 518), as also to the average closing price during the previous two weeks (Rs 508) on NSE.
This QIP raises Marico’s equity share capital to Rs 609 million, an increase of 5 per cent. While some of the subscribers to the issue are existing investors, the issue has also brought aboard a fresh cross section of FIIs and Mutual Funds.
Announcing the QIP issue, Mr Harsh Mariwala, Chairman and Managing Director, Marico Limited, said, "We are pleased at the response from a wide range of investors. This reflects confidence in Marico’s strategies towards sustainable profitable growth in Beauty and Wellness."
Mr Milind Sarwate, Chief Financial Officer, Marico Limited said, "The QIP equity restores the balance in Marico’s financial gearing. This will create further elbowroom for us to raise debt at a short notice to fund fresh acquisition opportunities that could boost our growth efforts.
"We are pleased at the speed and ease with which we could raise equity through the QIP route – it feels good to be amongst the first to leverage this progressive measure from SEBI.”
Citigroup Global Markets and Kotak Investment Banking acted as the Joint Global Coordinators and Joint Book Runners for this QIP.
Mr Ravi Kapoor, Managing Director – Head of Equity Capital Markets, Citigroup, observed: "The quality of the book and the price per share received by Marico is reflective of its strong fundamentals, as also investor confidence in its future performance.”
Mr Chetan Savla, Executive Director and Co-Head Equity Product Group, Kotak Investment Banking, said, "Marico’s constant endeavor to build business through organic and inorganic means and consistent financial performance have received an overwhelming response from marquee investors.
"This is the third QIP offering anchored by Kotak. We believe the process is achieving maturity and acceptance by investors."
The legal counsels for the QIP were Vaish Associates, Amarchand Mangaldas & Suresh A Shroff & Co, Mumbai and Dorsey & Whitney, London.