Cholamandalam Investment Initiates QIP At Rs 1,200.51 Per Share Floor Price
On 28 September, Cholamandalam Investment and Finance Company announced the commencement of its qualified institutional placement (QIP) issue with a floor price of Rs 1,200.51 per equity share.
During a board meeting held on the same day, the company "approved the floor price for the issue" and authorised the opening of the issue. Cholamandalam, a non-banking financial company (NBFC) backed by the Murugappa Group, indicated that it might offer a discount of "not more than 5 per cent" on the floor price set for the QIP issue.
While the exact size of the issue was not disclosed, sources informed a media house that the company plans to raise up to Rs 2,000 crore through the equity component of the QIP and an additional Rs 2,000 crore through the issuance of compulsorily convertible debentures (CCDs).
The CCDs will carry a face value of Rs 1,00,000 each, as stated in Cholamandalam's regulatory filing. The company added that each CCD would accrue interest at a rate of 7.50 per cent per annum, calculated on the face value of the CCD from the date of allotment until the Conversion Date. Interest will continue to accrue daily and will be payable in half-yearly installments to CCD holders until the CCDs are converted into Equity Shares.
This QIP issuance follows the NBFC's strong financial performance in the first quarter of FY24, where it reported a 28 per cent year-on-year increase in standalone net profit to Rs 726 crore. Total income for the April-June period reached Rs 4,134 crore, compared to Rs 2,771 crore in the same period of the previous year.
On 28 September, the company's shares settled at Rs 1,219.55 each on the BSE, representing a 1.77 per cent increase compared to the previous day's closing price.
