Hindalco raising up to Rs 5000 crore by way of a rights issue

Hindalco Industries declined 5.55% to Rs 162.25 at 13:35 IST on BSE after its board approved raising up to Rs 5000 crore by way of a rights issue to redeem a bridge loan it had taken for acquisition of Novelis Inc.

The company made the announcement of the rights issue during the market hours today, 20 June 2008.

The stock hit a high of Rs 173.90 and a low of Rs 162.05 so far during the day. The stock had a 52-week high of Rs 223.40 on 15 November 2007 and a 52-week low of Rs 135 on 22 August 2007.

The company has an equity capital of Rs 122.71 crore. Face value per share is Rs 1.

The current price of Rs 162.25 discounts its Q4 March 2008 annualised EPS of Rs 35.14, by a PE multiple of 4.61.

The ratio for the rights issue will be 1:3, i.e. one right of Rs 1 each for every three equity shares of Rs 1 each held by the shareholder as on the record date.

In February 2007, Hindalco Industries entered into a definitive agreement to acquire Novelis in an all cash transaction for a consideration of $6 billion. Novelis is a global leader in aluminium rolled products and aluminium can recycling.

Hindalco Industries’ net profit rose 49.3% to Rs 1077 crore on 5.5% increase in net sales to Rs 5010.20 crore in Q4 March 2008 over Q4 March 2007.

The company is India's largest aluminium producer and is engaged in producing aluminium and semi- fabricated products.