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Ramkrishna Forgings plans to raise up to Rs 500 cr via QIP



Ramkrishna Forgings plans to raise up to Rs 500 cr via QIP

Mumbai: Leading forging component maker is planning to raise Rs 400-500 crore through qualified institutional placement (QIP) to prune its debt, said people aware of the development. The Kolkata-headquartered company, which sells half of its volume to overseas markets, had a debt of Rs 1,070 crore at the end of FY21, up from Rs 879 crore in FY19, according to the company‘s presentation.

The company’s debt to equity ratio rose to 1.25 in FY21 against 0.90 in FY19. The QIP proceeds will help to bring down the company’s debt burden and reduce interest expenses.

The company did not respond to ET’s email query about the fund expansion plan until press time on Thursday. Shares of Ramkrishna Forgings slipped 1.53% to close at ₹1,168.85 on BSE Thursday. According to sources, Ramkrishna Forgings will be offering a price band of ₹1,200-1,300 per share to the QIP investors, which is likely to open at the end of October.

The QIB would result in equity dilution of 12-13% when it is raised between Rs 1,200 and Rs 1,300 a share. A leading domestic investment banker is conducting roadshows to gauge investors’ appetite and build an order book.

Promoters, the Jalan Family, are likely to participate in QIP. Promoters hold 45.9% in company and balance is with institutional and retail investors. MFs Aditya Birla Sun Life Pure Value Fund and Franklin India Smaller Companies Fund are the two biggest shareholders with a stake of 5.67% and 1.26%.

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