Ascent Capital is picking around 1.5 per cent stake in the domestic ratings agency Credit Analysis and Research Ltd (CARE) through a preferential allotment worth Rs 25 crore ($3.7 million), the company disclosed to the stock exchanges on Thursday.
Ascent India Fund III, managed by Ascent Capital Advisors India Private Ltd, is buying close to 4.5 lakh equity shares at Rs 560.15 each, subject to shareholders’ approval.
CARE scrip shot up 3 per cent to close at Rs 542 a share on the BSE in a strong Mumbai market on Thursday. The preferential allotment is proposed at a 6.4 per cent premium to the last traded price of CARE a day ahead of the announcement.
The company said it is undertaking the preferential issue to comply with the minimum capitalisation norms of $0.50 million applicable to non-fund based non-banking finance companies as required by the Reserve Bank of India (RBI) in connection with its initial public offer last December.
In May this year, RBI had extended the date of compliance with the minimum capitalisation requirement by the company from June 9, 2013 to September 30, 2013. The share issue awaits final approval by shareholders in CARE’s AGM scheduled to be held on September 27, 2013.
CARE counts several banks among its investors, including IDBI Bank Ltd, Canara Bank and State Bank of India as well as other investors such as Aditya Birla Private Equity and Tata Investment Corporation Ltd.
Early this year, Ascent invested in Ratnakar Bank and with CARE it is betting more on the financial services domain. Last year it had invested in iNurture, a company in the higher education space, e-com firm Bigbasket and tertiary healthcare services chain Kerala Institute of Medical Sciences.
(Edited by Joby Puthuparampil Johnson)