Rights issue market gets back its rhythm (2) July 25, 2009
Posted by dhirendra08 in Biggest Issues, Final Pricing.Tags: Comapny's Track Record, Expect Fund Mobilizaton, Fate, Market Condition, Pricing, Ratio of One Share
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The fate of the forthcoming offers would depend on factors such as pricing of the issues and fundamentals of the companies, according to merchant bankers. “Shareholders would definitely subscribe to an offer if its pricing is good and the company’s track record has been decent,” said G Shiva Ganesh, president of Collins Stewart Inga, a Mumbai-based merchant banker. The merchant banker is the lead manager for the forthcoming rights issues of Sadbhav Engineering and JMC Projects.The Economic Times
Of these companies, Sadbhav Engineering is planning to raise Rs 125 crore, though the company has not yet finalized pricing and schedule of the offer. JMC Projects has decided to offer rights in the ratio of one share for every five shares held by shareholders, at Rs 110 per share against the market price of Rs 169.
With the improvement in secondary market conditions, merchant bankers expect fund mobilization from rights issues to rise substantially this fiscal, after recording a sharp decline in 2008-09. Nearly two dozen companies raised Rs 12,622 crore in 2008-09 compared with Rs 32,518 crore mobilized by 30 companies in 2007-08. The fall in rights mobilization was mainly because of the devolvement of the two biggest issues — Hindalco and Tata Motors — which were planning to raise Rs 5,048 crore and Rs 4,146 crore, respectively.
