Hinduja Foundries today said its board has approved the withdrawal of the proposed Rs 125-crore rights issue in view of volatile market conditions.

The company, which is the country’s largest automotive jobbing foundry maker, had planned to issue 1.66 crore equity shares of Rs 10 each on rights basis at Rs 75 each for mopping up Rs 124.98 crore.

“... due to current volatile market conditions vis-a-vis the current market price of the company’s shares quoted at the bourses...the options are very limited to ensure complete subscription of the issue,” Hinduja Foundries said in a BSE filing.

Hinduja Foundries had reported Rs 44.37 crore loss in the January-March quarter of 2011-12, down from Rs 2.08 crore net profit in the corresponding quarter previous fiscal.

Meanwhile, the company’s stock price has tumbled over 17 per cent so far this year (January 2-May 30), while the BSE 30-share benchmark Sensex has gained over 5 per cent during the same period.

Hinduja Foundries’ shares ended the session at Rs 51 apiece on the BSE today, up 3.34 per cent over the previous close.

The company board, at its meeting on May 15, had given its nod for allotment of 3 crore preferential shares to the promoters for an amount not exceeding Rs 300 crore.

It has also accorded approval to increase the authorised share capital of the company to Rs 550 crore from Rs 95 crore.

In an another filing, Hinduja Foundries said it has convened an extra-ordinary general meeting on July 4 to seek shareholders’ approval for allotment of preferential shares to the promoters and to raise the authorised capital.

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