Nandan Denim to issue fully convertible warrants at Rs. 200 per share to FII Polus Global Fund

Nandan Denim Limited has proposed to issue fully convertible warrants at Rs. 200 per share to UK-based foreign institutional investor, Polus Global Fund, for a total consideration of Rs. 50 crores. The warrants will be converted into equity shares at Rs. 200 per share within 18 months time. The conversion price of Rs. 200 per share is at over 70% premium to Friday, September 18, 2015 closing price of Rs. 115.50 per share on BSE and 250% premium to the book value of Rs. 57 per share.

The company will seek shareholders' approval for this preferential allotment at its upcoming Annual General Meeting (AGM) on September 29, 2015. The UK-based FII currently holds 1.35 lakh shares or 0.30% stake in the company which will increase to 26.35 lakh shares or 5.48% post conversion of the warrants into equity shares. The warrant holder will have to pay an amount equivalent to atleast 25% (Rs. 12.5 crores) of the consideration on or before the allotment of warrants while balance 75% shall be payable on or before the time of exercise of the warrants (i.e. 18 months)

Nandan Denim is in the middle of its capex execution with outlay of Rs. 612 crore for expansion of denim fabric manufacturing capacity, spinning capacity and shirting capacity. The Capex has a requirement of equity funding to the tune of 30% and this equity infusion, coupled with the internal accruals would balance the funding while the external funds have already been tied up.

Shares of Nandan Denim Limited was last trading in BSE at Rs.130 as compared to the previous close of Rs. 115.5. The total number of shares traded during the day was 201492 in over 2674 trades.

The stock hit an intraday high of Rs. 133.9 and intraday low of 111.3. The net turnover during the day was Rs. 25869432.

Source : Equity Bulls

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