Godrej Industries successfully raises Rs 405 crore via IPP route

25 Jul 2012 Evaluate

Diversified business conglomerate, Godrej Industries raising Rs 405-crore through the institutional placement programme (IPP), has emerged second company from the Godrej stable to tap this route after the market regulator Securities and Exchange Board of India (SEBI) notified IPP norms in February to help promoter’s dilute stake. Back in March, real estate arm Godrej Properties raised Rs 470 crore through IPP route.

The company, which issued up to 15666734 equity shares of Re 1 each, after witnessing an oversubscription, exercised its option of issuing additional 1566,673 equity shares. The issue witnessing good demand was oversubscribed by 1.67 times. Company’s board of directors the company had by a resolution dated July 21, 2012, fixed the price band at Rs 210 to Rs 235 per equity share for the proposed issue. Kotak Investment Banking is the lead manager to the issue.  Further, the company plans to utilize the proceeds of this issue for reducing its debt burden and also for financing its ongoing and future financial projects.

Although IPP norms are broadly similar to QIP, however, while any company can raise funds via with a Qualified Institutional Placement (QIP) route, IPP route can be adopted by the company only for reducing promoter shareholding. Since, SEBI mandated companies to bring down their ownership at 75 per cent till June 2013, the company has to undertake this method for reducing its stake. As on June 30, promoters of Godrej Industries held 79.10 per cent stake in the company.

Godrej Industries Share Price

1120.95 1.65 (0.15%)
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