Mumbai: Sterlite Industries (India) Ltd, India’s largest copper producer, fell the most in two months in Mumbai trading after selling $500 million (Rs2,315 crore) of convertible debentures to finance its copper expansion plans.
Sterlite shares fell as much as 9% to Rs790 in intraday trading, the most since 7 August, and closed at Rs820.90 on the Bombay Stock Exchange. Its American depository receipts fell 1.9% to $16.62 on Thursday.
Sterlite, a unit of Vedanta Resources Plc, said on Thursday it plans a 400,000-tonne expansion, together with a 160MW power plant, at its south India copper smelter at an investment of about Rs23 billion ($497 million). The debt sold this month comes on top of the $1.5 billion it raised in July selling shares in the US.
“The shareholders want to know the end use of the funds raised,” said Rakesh Arora, an analyst at Macquarie Group Ltd in Mumbai with an outperform rating on the stock. “The company has been in the market regularly as it has ambitious expansion plans.”
The notes will be converted at $23.33 apiece into American depository shares in 2014, Mumbai-based Sterlite said on Firday in a statement. The notes will mature 30 October, 2014.
Sterlite, locked in a bidding war for more than a year with Grupo Mexico SAB for bankrupt Asarco Llc, topped its rival’s offer for the copper miner by almost 3% to $2.57 billion last month. A decision on the sale will be announced at a 19 October hearing in the US district court in Brownsville in Texas. Sterlite and Grupo Mexico want to buy Asarco to gain control of copper mines in Arizona. Prices of the metal doubled this year on rising Chinese demand and optimism the US economy will recover from a recession.