Kolkata: B K Birla Group company Kesoram Industries is likely to offer a hefty discount of 30 per cent or more from market price in the proposed upcoming rights offer to reward the shareholders, company sources said.
Kesoram had tweaked its fundraising plan by dropping a preferential allotment of shares to a promoter group company at Rs 100 crore at a price of Rs 100 per share and a rights offer worth Rs 200 crore.
The company has now decided to drop the preferential issue to promoters and instead go for Rs 400 crore rights offer in a single shot in the overall Rs 500-600 crore raising plan to make Rs 1,900 crore debt from PE funds serviceable.
“The rights offer will be made attractive to shareholders. It will be not less than 30 per cent discount to the ruling price otherwise it will not be remunerative to retail shareholders,” company sources told PTI.
“After receiving feedback from shareholders of the company, who desired to participate in a rights issue, we decided to cancel the preferential allotment and go for a larger rights offer,” the sources said.
On Friday, Kesoram closed at Rs 92.55 per share of Rs 10 each.
The company board will be meeting on August 12 to ratify the rights issue plan and announce the quarterly financial results.
The plan is a win-win for both retail shareholders who were deprived of rewards for a long time and the company with a liquidity position getting stronger and faster turnaround.
Last dividend paid by the company was back in 2013.
While, in the previous preferential issue plan to the promoter, only Rs 25 crore was supposed to come upfront, with the rest would have come after 18 months.
The promoter shareholders also include Kumar Mangalam Birla, the grandson of B K Birla and the chairman of Aditya Birla Group.
Pilani Investment and Century Textiles, which is understood to be under his control, hold nearly 20 per cent stake in the company out of nearly 46 per cent of the total promoter’s holding in Kesoram.