Warburg Pincus-backed Moser Baer, a manufacturer of optical storage devices who has also diversified into solar energy and home entertainment space, is looking to raise up to $125 million (Rs 562.5 crore) through various routes, including sale of shares and other convertible or non-convertible instruments. The company will primarily target institutional investors or foreign investors.
The firm has not disclosed the purpose of the fundraising plan.
Moser Baer scrip rose 1.35 per cent to close at Rs 22.45 a share on Monday in a weak Mumbai market. At this price, the firm is valued at Rs 377 crore or just $82 million. This means, if the firm sells shares at the current market price, it will lead to significant equity dilution, estimated at around 60 per cent.
The promoter Puri family owned just 16 per cent stake in the loss-making company as of June 30 and with 60 per cent stake dilution, their holding will shrink to just about 6.5 per cent. However, the firm can raise funds through a mix of non-convertible debentures and share sale that will help trim the equity dilution.
In either case, the firm appears to be eyeing a major premium in its proposed fundraising. The company’s authorised share capital is being increased, which will allow the firm to issue another 132 million shares. If the firm goes ahead with only share sale and raises the maximum amount that it intends to, it is looking to sell fresh shares at around Rs 42 a unit, almost twice its market price.
Meanwhile, the firm has said it is cancelling the unissued 0.75 million preference shares from the existing authorised share capital.