KEI Industries Ltd., a leading wires and cables manufacturer, has raised Rs. 500 Cr. through Qualified Institutional Placement* (QIP) of shares. The QIP was opened on 23rd January and closed on 28th January 2020 with the floor price of Rs 518.14 per equity share. The issue was of Rs 400 crore with a green shoe option of another Rs 100 crore.
The company issued shares to investors such as L&T Mutual Fund, ICICI MF, DSP MF, Goldman Sachs, Invesco, HSBC Global and Tata AIA Life Insurance Company.
As mentioned in the exchange filling made by KEI on 28th Jan 2020 “Determined and approved the allocation of 10,000,000 Equity Shares at an issue price of Rs. 500 per Equity Share (including a premium of Rs. 498 per Equity Share) upon the closure of the Issue, [which is at a discount of 3.50% i.e. Rs. 18.14 per Equity Share to the floor price of Rs. 518.14 per Equity Share], for the Equity Shares to be allotted to eligible qualified institutional buyers pursuant to the QIP.”
Use of Funds Raised by KEI
As reported in Economic Times dtd. 28th Jan 2020, KEI plans to use partial funds to pay debts and to use for growth plans of the company. As per the article the company is looking to set up a new manufacturing facility. As of 30th September 2019, the total debt of the company stood at Rs. 670 Cr.
Gaurav Bhandari, CEO Monarch Networth Capital Ltd., from the advisory company of the deal said in the same news article “This fund raise will help the company to significantly expand its retail presence which will result in higher margins and better growth in the coming years. The company is looking to capitalize on the recent reforms in the power sector.”
About the Company: Established in 1968, KEI Industries is a cable manufacturing company headquartered in New Delhi. It offers wide range of cables such as- low and high voltage cables, extra high voltage cables up to & including 400 kV, control and instrumentation cables, house wires, stainless steel wires, high-technology specialty cables, rubber cables, submersible cables and Engineering, Procurement and Construction (EPC).
*QIP allows an Indian-listed company to raise capital from domestic markets without the need to submit any pre-issue filings to market regulators.