Auto component-maker Amtek India Ltd has received board’s nod to raise up to $250 million (Rs 1,336 crore) through various means including overseas share issue or a qualified institutional placement, the company disclosed on Tuesday.
On the Bombay Stock Exchange, shares of Amtek India last traded at Rs 87.50, down 2.72 per cent from previous close. At this price the company is valued at Rs 2,513 crore.
Although, the company has stated that the fund raising will be spread over one or more tranches, it may lead to significant equity dilution unless the firm goes for a large premium on the existing share price to issue fresh shares.
“The company in order to enhance its global competitiveness, increase the ability to compete with the peer group in domestic and international markets, needs to strengthen its financial position by augmenting long term resources and to achieve this company may need to issue securities in the international markets,” the auto component maker commented on the fund raising plan.
Along with the raising the money, the company also received nod to increase the borrowing limit up to an amount of Rs 6,000 crore.
Amtek India is majority owned by public listed group flagship Amtek Auto, which in turn is a firm backed by several institutional investors including Warburg Pincus and ChrysCapital. Incidentally, both these PE firms where earlier also investors in Amtek India but exited the firm following a group restructuring where promoters led by Arvind Dham sold their stake in Amtek India to Amtek Auto in a consolidation exercise.
After that, Amtek Auto made an open offer for Amtek India, along with its promoter group, and had increased its holding in the company to 61.64 per cent in the company.
Amtek India is engaged in the manufacturing and sale of iron cast automotive components and assemblies in India and internationally. It offers components for two/three wheelers, cars, tractors, light commercial vehicles, heavy commercial vehicles and stationary engines.