BackAshoka Buildcon to launch its `500 crore QIP issuance
This is the third instance in a month of an infrastructure firm tapping the institutional route to raise capital
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Mumbai: Infrastructure firm Ashoka Buildcon Ltd will raise ₹ 500 crore by selling shares to institutional investors starting on Monday, two people familiar with the development said on condition of anonymity.
“The book will be opened tonight and it is supposed to close on Wednesday. The firm will give a discount of 9-10% on today’s closing price," one of the people said.
The company declined to comment.
On Monday, Ashoka Buildcon’s shares closed at ₹ 193.10 on BSE, unchanged from its previous close, while its benchmark Sensex rose 0.57% to close at 29,044.44 points. A 10% discount will help institutions buy the shares for ₹ 173.79.
With total revenue of ₹ 1,795 crore in 2013-14, Ashoka Buildcon builds highways in India and is involved in 28 public-private partnership projects. The company builds and operates roads and bridges.
This is the third instance in a month of an infrastructure firm tapping the institutional route to raise capital.
Last week, Mumbai-based Hindustan Construction Co. raised ₹ 400 crore. The issuance was priced at a 10% discount to the share price. In August, the company had passed a resolution to raise ₹ 750 crore through an issuance. Another company which managed to raise around ₹ 440 crore last month was IRB Infrastructure Developers Ltd. It has a resolution to raise up to ₹ 1,500 crore.
Since 10 September, none of the infrastructure companies managed to raise capital through share issuances.
“At the current prices, investors see a lot of value to come in and invest. They have been keen on infrastructure but the valuations were high earlier," said the second person mentioned above.
In 2015, 14 firms have raised ₹ 5,257 crore through qualified instutional placement (QIP). The large QIP issuances this year include HDFC Bank Ltd’s ₹ 2,000 crore issue and Dewan Housing Finance Corp Ltd’s ₹ 810 crore QIP issue.
Last year, 33 listed companies had raised ₹ 31,684.22 crore from QIPs, according to Prime Database, a primary market tracker.
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