EPC services provider Ashoka Buildcon raises around $78M via QIP

Ashoka Buildcon Ltd, an engineering, procurement and construction (EPC) services provider, has raised Rs 500 crore (approximately $78 million) through a qualified institutional placement to fuel its growth plans, the company said in the statement on Monday.

It issued 28.4 million equity shares of Rs 5 at a share price of Rs 175.80, it said.

The issue saw about 40 per cent participation from foreign institutional investors and remaining 60 per cent from domestic insurance companies and mutual funds.

“This reinforces the faith of international and domestic institutional investors in our company,” Satish Parakh, managing director of Ashoka Buildcon, said in the statement.

“We will use the proceeds to fund our growth plans supported by strong projects pipeline and improving economic environment in India,” he said.

IDFC Securities Ltd, ICICI Securities Ltd, Axis Capital Ltd and Macquarie Capital Securities (India) Pvt Ltd acted as the book running lead managers to the QIP issue.

Amarchand & Mangaldas & Suresh A. Shroff & Co and Duane, Morris & Selvam LLP were legal advisors to the transaction while M.P. Chitale & Co. was the auditor.

Ashoka Buildcon is a leading player in the toll-based build, operate and transfer (BOT) project space in India. The firm is engaged in the engineering and construction of residential, commercial, industrial and institutional buildings.

It is also active in the power transmission and distribution sector with power projects in Tamil Nadu, Maharashtra, Chhattisgarh and Bihar.

The company had received its shareholders' approval last year to raise up to Rs 850 crore through issue of shares to qualified institutional buyers.

In October last year, IDFC Alternatives, the private equity arm of IDFC Ltd, exited from Ashoka Buildcon by selling its remaining stake, pocketing 2x on its initial investment of Rs 100 crore which was made nine years ago. 

IDFC Alternatives (then IDFC PE) had invested around Rs 100 crore in Ashoka Buildcon in August 2006.

Ashoka Buildcon scrip closed at Rs 161.80 per share, down 4.03 per cent on the BSE in a weak Mumbai market on Monday.

(Edited by Joby Puthuparampil Johnson)

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