Bhushan Steel Ltd expects to raise about Rs 475 crore through its proposed rights issue. The company has set the rights issue price at Rs 335 a share, a discount of 15 per cent to the current market price of Rs 396.50.
The rights issue price includes a premium of Rs 333 on face value of Rs 2 each. In a note to the BSE, the company said on Wednesday that its board of directors have approved the rights issue of one share for every 15 shares held by the shareholder (ratio of 1:15). The company will issue 1,41,57,220 shares through the proposed issue. The record date is yet to be announced.
The Bhushan Steel scrip ended 1.6 per cent lower at Rs 396.50 on the BSE on the day.
The company expects to utilise the rights issue proceeds to part finance ongoing expansion projects and reduce its debt.
Bhushan Steel is setting up a new 3-million tonne a year plant in Orissa, which is scheduled to be operational next fiscal. At present, the company has a production capacity of 2.5 mtpa and manufactures secondary steel products such as cold rolled sheets and galvanised coil among others.
Bhushan Steel reported a 1.3 per cent drop in profits, dented by high interest costs, for the December quarter over corresponding last year, while its sales grew 24 per cent. The company reported a net profit of Rs 277 crore on revenue of Rs 2,407 crore for the December quarter as against a net of Rs 280 crore on revenues of Rs 1943 crore in corresponding last year.