Nicholas Piramal India has decided to launch an 1: 10 rights issue to raise not more than Rs 350 crore (Rs 3.5 billion).
The board, which met today to decide the ratio of the proposed rights issue, has not finalised the price of the offer. In a notice to the stock exchanges, the company said the price of the offer "would be decided later as may be permitted, but prior to filing the final letter of offer with the designated stock exchanges."
The ratio indicates that shareholders will get one share for every 10 ordinary equity shares held. The face value of stock is Rs 2.
Ajay Piramal, chairman, had earlier said that the proceeds of the rights issue would be utilised for financing plans in the immediate future.
"Considering the latent value creation opportunity in the company, we thought it fit to conserve the value for existing shareholders in this investment phase, and hence decided on rights Issue as the mode of fund raising," he had added.
Nicholas Piramal has been growing through acquisitions over the last few years. "Since the company is banking heavily on inorganic growth, it requires a considerable sum of investment," said an industry source.
Nicholas Piramal is eyeing major acquisitions in the US, among the most lucrative drug markets in the world. The company is also investing in upgrading marketing skills of its field staff. It has got the country's largest pool of field executives on its rolls.
It is also investing in the promotion of its over-the-counter product portfolio.
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