Home >Markets >Stock Markets >Parag Milk Foods shares jump as company plans to raise 316 crore

Mumbai: Shares of Parag Milk Foods gained as much as 4.8% on Monday after the company said it plans to raise 316 crore by preferential allotment of equity shares, foreign currency convertible bonds (FCCBs) and other instruments from International Finance Corporation (IFC), Sixth Sense Venture Advisors and the promoters.

Parag Milk shares closed at 114.70, up 3% from its previous close, while the benchmark index, Sensex lost 1.74%.

According to a filing to the exchange, the promoters will invest 111 crore which includes preferential allotment of equity shares with a face value of 10 each.

International Finance Corporation (IFC) will invest up to 155 crore by way of subscription to preferential issue of equity shares and FCCBs in addition to proposed subscription to NCDs of 150 crore.

Sixth Sense Venture Advisors LLP will invest 50 crore by way of preferential allotment of 4.50 million equity shares.

“The funds that will be raised through FCCB will be utilised for meeting our capex requirements over the next two years and would free up our cash flows during that period," Devendra Shah, chairman, Parag Milk Foods said.

The proceeds of preferential shares and warrants would be utilised to reduce short-term debt limits and enhance working capital for future growth. This would provide enough firepower to bolster the balance sheet and propel the company for future growth, he said.

Parag Milk Foods reported a 59.35% decline in net profit to 11.21 crore for the December quarter against a net profit stood of 27.58 crore for the same quarter a year ago. Revenue from operations for the quarter declined 25.17% to 473.59 crore .

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