Ashok Leyland, the second-largest commercial vehicle maker in India, has opened its qualified institutional placement (QIP) issue late Thursday, according to a stock market disclosure. The firm did not declare the number of shares it plans to sell but set a floor price of Rs 34.3 a unit for the share sale.
Last year the firm had taken an enabling approval for issue of up to 185.2 million shares. If the company goes ahead and sells all of this, it would raise at least Rs 636 crore ($105.8 million) from the issue. It would dilute the equity base by up to 6.5 per cent.
The fund being raised through the QIP will be used for capital expenditure and to pare its debt. The company is looking to bring down its debt-to-equity ratio from 1.44 times in fiscal 2013-14 to 1.1 by the end of this year.
The company counts Singapore’s sovereign wealth fund Temasek as one of its institutional shareholders.
Ashok Leyland shares last changed hands at Rs 36.15 a unit, down 4.6 per cent on the BSE in a flat Mumbai market on Friday.
With the rise in stock market prices post election results, a clutch of listed firms have tapped into the market to raise funds through QIPs. These firms include Reliance Communication, Idea Cellular, Yes Bank and SKS Microfinance.
(Edited by Joby Puthuparampil Johnson)