The Hindu Business Line : Electrosteel Castings raises $40 m through GDRs

The Rs 942-crore ductile iron (DI) pipes major has raised $40 million (Rs 172 crore) through the issue of 4,571,428 GDRs, including a green-shoe option of $5 million (5,71,428 GDRs).

Each GDR represents one fully paid-up equity share of the company with a nominal value of Rs 10 per share, priced at $8.75.

The stock's closing price on Friday on BSE was Rs 467.70, the 52-week high/low being Rs 510/Rs 296 respectively. The previous day's close was Rs 472.65.

Each GDR's discounted price thus works out to around Rs 370, and these will now be admitted for trading on the Professional Securities market of LSE.

Talking to Business Line from London, Mr S.Y. Rajagopalan, Director, Finance, Electrosteel Castings, said the proceeds would be used mainly for long-term working capital needs and part-financing of other expansion works and replacement of debt.

He said HSBC Bank plc and Jermyn Capital Partners plc acted as joint Lead Managers, and UTI Bank Ltd was advisor to the issue.

According to him, the issue generated demand from institutional investors, mainly at London, Hong Kong and Singapore.

The company's authorised capital has now been increased to Rs 50 crore from the earlier Rs 20 crore. ECL, he pointed out, was already committed to maintaining manufacturing excellence in DI pipes, having pioneered its manufacture in India.

The company's new finishing line for ductile iron fittings at Khardah Works, he said, will enable it to match global standards and export world-class products to the developed economies.

The new line has been specially put up for the manufacture of corrosion-resistant DI pipe fittings, and will be inaugurated by the West Bengal Finance Minister, Dr Asim Dasgupta, at a special ceremony on Saturday.

Pointing out that fittings and accessories play a major role in the function and success of any pipeline, he said these are an extension of pipes, joining them across distances and providing bends/branches for complete pipe laying solutions.

The company's total business, besides DI pipes, fittings and cast iron pipes, also comprises turnkey services which include manufacturing, supplying, laying, operating and transferring complete DI Pipe projects.

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