JSW Steel has sought shareholders'approval to raise Rs 4,000 crore through qualified institutional placement.
Proceeds of the issue will be used for capital expenditure and refinancing high-cost debt, besides meeting unlikely shortfall in unforeseen circumstances, the company said.
It is in the interest of the company to raise long-term resources with convertible option to optimise capital structure for future growth, it said.
The economy is poised for robust growth, backed by strong macroeconomic factors and government’s pro-growth policies.
JSW Steel will be completing its brownfield expansion to reach 18 million tonne per annum capacity by the end of this fiscal. It has a strategic vision to reach 40-mtpa capacity by 2025 with significant investment in mineral resources such as iron ore and coal.
The company has moved an enabling resolution and sought shareholders' approval to raise Rs 10,000 crore through debenture this financial year. Last fiscal, the company had raised Rs 2,725 crore.
JSW Steel has chalked out a capital expenditure of Rs 5,200 crore this fiscal and another Rs 3,800 crore next fiscal to augment its steel making capacity to 18 mtpa fro 15 mtpa currently. It plans to raise Rs 3,200 crore through external commercial borrowings to fund its capex this fiscal.
JSW intends to have its debt in rupee and dollar of equal proportion against the current level of 54 per cent in rupee and 46 per cent in dollar. In order to achieve this, the future fund-raising will be done mostly in dollar, said Seshagiri Rao, Joint Managing Director, JSW Steel.
The company has a consolidated net debt of Rs 35,800 crore as of March 31, 2015 and net debt to equity ratio of 1.02 is to 1.
Shares of the company were down two per cent at Rs 869 on Monday.