Infrastructure group Jaiprakash Associates is looking to raise Rs 2,500-3,000 crore through secondary sale of equity. The firm is looking to sell the treasury stock it will receive after merging its four subsidiaries with itself, reports Economic Times. The group, which also has a presence in real estate and cements, is merging its units Jaypee Hotels, Jaypee Cement, Gujarat Anjan Cement and Jaiprakash Enterprises with itself. With the merger it will get treasury stcoks amounting to a 14.5% stake in the combined entity.
The stock of the company was trading at Rs 221 per share today, with a marke capitalisation of Rs 26,221 crore. The funds raised through stake sale will be used to retire debt and for capital expansion of companies various businesses. Jaiprakash is planning to invest Rs 2,000 crore in the cement sector and another Rs 400 crore in construction. Earlier this year the firm also bought FCCBs worth $36 million.
For FY09, the total income of Jaiprakash stood at Rs 4,967.47 crore as compared to Rs 4,394 crore in the same period last year. The net profit for the year ended March 31, 2009, stood at Rs 420.25 crore. The company had a net profit of Rs 676.8 crore in FY08.
Taking advantage of the dramatic upturn in the Indian equity markets, several firms have raised funds through secondary sale of shares. Some of them include India’s largest real estate firm DLF, wind-turbine maker Suzlon Energy and most recently direct-to-home operator Dish TV India.