The firm received applications for 8.63 crore shares or 160% of the issue size at the close, according to market sources.
In all, ₹561 crore worth shares were bid for, they said.
EIH plans to use ₹280 crore out of the net proceeds of the rights issue to repay/prepay some of its existing borrowings, according to the offer letter for the rights issue.
The remaining ₹65.98 crore are to be used for general corporate purposes.
EIH had reported a profit of ₹165.14 crore on a revenue of ₹1,674.69 crore in fiscal 2020.
In the rights issue, 5.37 crore equity shares of face value ₹2 each of the company were offered at a price of ₹65 apiece (including a premium of ₹63) to eligible existing shareholders in the ratio of 8 rights equity shares for every 85 equity shares held.
Promoters, who hold a 35.25% stake in EIH, had agreed to subscribe to their full rights entitlement.
According to the offer document, EIH had ₹539.96 crore debt as of August 31, 2020.
"The repayment/ prepayment of loans by utilising the net proceeds will help reduce our outstanding indebtedness, debt-servicing costs and improve our debt to equity ratio.
"In addition, we believe that the improved debt to equity ratio will enable us to raise further resources in the future to fund potential business development opportunities and plans to grow and expand our business," it said.
The board of EIH had in September approved fundraising of ₹350 crore through a rights issue to shore up liquidity and strengthen the balance sheet in the wake of an uncertain business environment.
The rights issue would lead to equity dilution of 8.6% on a post diluted equity base of 62.5 crore, it would have a positive impact on Earnings per share given the current lower return on equity of 4.2% for Fy22e (due to restricted business) versus the average cost of debt of around 9.2%, ICICI Securities had last month said in a commentary on the rights issue.
"The current pandemic environment has thrown up severe challenges for the entire hotel industry. However, EIH, with its strong balance sheet and strategic property locations is poised to benefit from a favourable demand-supply matrix in the long run due to likely postponement or reduction in new room supplies in the industry," it had said.
Shares of EIH Ltd were the last trading in BSE at ₹76.85 as compared to the previous close of ₹76.30.
This story has been published from a wire agency feed without modifications to the text.
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