Bharat Forge to raise $150 m; HDFC mops up Rs 4,300 crore

In an effort to meet its long-term financing requirements, Bharat Forge (BHARATFOR.NS : 260.6 -3.15) has decided to raise up to $150 million by issue of securities, including equity or equity-linked securities, on terms to be decided by the board. The resource-raising plans were approved by the company's board of directors, in a meeting held on Tuesday.

The company will be using the funds to expand manufacturing capabilities in the non-automotive sector in India, Amit Kalyani, its executive director, said. "We have seen tremendous traction and growth opportunities (in non-automotive segment) and want to be prepared to fund those growth opportunities and capture larger market," he said. Kalyani said the board will decide in consultation with its investment bankers on whether to choose the global depositary receipts (GDR) or the qualified institutional placement (QIP) route. The issue will result in 10-12% dilution of equity, he added.

Meanwhile, Housing Development Finance Corporation Ltd (HDFC) has raised Rs 4,300 crore through qualified institutional placement of non-covertible debentures (NCDs) with attached warrants that entitle the holder to buy HDFC shares at around Rs 3,000 per share within three years.

The corporation has raised Rs 4,000 crore through issue of debentures, which offer a return of 7.15% and 7.85% for two and three-year investments, respectively. Close to Rs 300 crore was raised through issue of warrants priced at Rs 275, which gave the holder the option to buy HDFC shares at Rs 3,000 within three years.

The effective price for the warrant holder works out to be Rs 3,275 per share. If all warrant holders exercise their option to buy shares, HDFC would receive another Rs 3,100 crore of capital, considering that it has committed to restrict equity dilution of 3.5%.

HDFC sold its debt in two tranches of Rs 2,000 crore each and three-year debentures carrying coupons of 7.15% and 7.85% . Institutional buyers like LIC is one of the biggest investors in the issue.

HDFC intends to use the net proceeds of the issue to augment its long-term resources. The securities issued by HDFC include 1,09,53,706 warrants with a right exercisable by the warrant holder to exchange it with one equity share of Rs 10 each of HDFC, anytime before three years from the date of its allotment.