By IANS,
Chennai : The New Delhi based integrated financial services group Religare Enterprises Limited (REL) has decided to go ahead with a two for three rights issue despite dismal market conditions, a company spokesperson said here Thursday.
At its meeting here Thursday, the company’s board approved a plan to raise around Rs.18.02 billion through a rights issue in the ratio of two shares for three shares held (2:3) at a price of Rs.355 per share to fund its future growth plans.
This means existing shareholders will be able to subscribe to two new shares of the company for every three shares they now hold.
The issue price is, however, higher than the current price of the company’s scrip which closed Thursday at Rs.325.25 at the Bombay Stock Exchange (BSE) and at Rs.325.10 at the National Stock Exchange (NSE).
On the BSE, the stock had seen a 52-week high of Rs.730 Mar 1, 2008 and a 52-week low of Rs.312.30 Oct 16, 2008.
On the NSE, the 52-week high and low were Rs.729 Feb 1, 2008 and Rs.300.00 Oct 28, 2008, respectively.
The company is promoted by Malvinder Mohan Singh and family, the promoters of India’s largest drug maker Ranbaxy Laboratories Ltd.
According to a regulatory statement filed with the BSE, the company said the promoters have given a firm commitment that they would subscribe to any unsusbscribed portion of the rights issue.
The Draft Letter of Offer is proposed to be filed with the market regulator Securities and Exchange Board of India (SEBI) around the first week of December, the statement said.
The Rs.761 million equity capital of Religare Enterprises is expected to go up to approximately Rs.18.76 billion after the issue and the total net worth of the company will increase to about Rs.24 billion, the statement said.
The objective behind the issue is to fund the company’s future growth plans.