JSW Steel today said it plans to raise up to Rs 4,000 crore through the Qualified Institutional Placement (QIP) route as the steel maker eyes a capacity of 40 million tonnes per annum (MTPA) by 2025.
The company will take up the issue of raising a maximum of Rs 4,000 crore at its annual general meeting next month, July 28, it said in a BSE filing.
“The Indian economy is poised for robust growth, backed by strong macroeconomic factors and government’s pro-growth policies. The company will be completing its present brownfield expansion to reach 18 MTPA capacity by the end of FY 2015-16.
“It has a strategic vision to reach 40 MTPA capacity by 2025 with significant investment in mineral resources i.E. iron ore and coal. It is in the interest of the company to raise long term resources with convertible option so as to optimise capital structure for future growth,” JSW Steel said in the filing.
The company has proposed that its Board be allowed to raise additional long term funding depending on market dynamics.
The funding will be raised through the “issue of equity shares and/or fully convertible debentures/partly convertible debentures/optionally convertible debentures/non-convertible debentures, along with warrants and/or convertible securities other than warrants convertible into equity shares, to eligible Qualified Institutional Buyers, in one or more tranches, through a QIP not exceeding a sum of Rs 4,000 crore,” it added.
The proceeds of the issue will be used for long-term funding to meet the planned capital expenditure and for other corporate purposes, including refinancing of expensive debt to reduce interest costs and to meet any unlikely shortfall in unforeseen circumstances, the filing said.
“The price at which the equity shares or other securities will be issued will be determined by the Board of Directors of the company in accordance with applicable law and in consultation with the experts/investment bankers/advisors. However, the basis of pricing of such specified securities shall be the pricing formula as prescribed under Regulation 85 of the SEBI Regulations,” JSW Steel said.