Nandan Denim Limited (NDL), a Gujarat- based fabric manufacturer, said it is planning to issue 50 lakh convertible warrants to foreign investors at Rs 200 each, aggregating to Rs 100 cr.
“The company will be issuing 25 lakh fully convertible warrants each to Foreign Portfolio Investors, LTS Investment Fund Ltd and LGOF Global Opportunities Ltd at Rs 200 each,” said the denim company.
LTS Investment Fund Ltd currently holds 11.64 lakh shares (2.42%) which post issue will increase to 36.64 lakh shares (6.91%).
This warrants include a premium of Rs 190 and will be the second warrant issue by Nandan Denim Ltd.
The conversion price of Rs 200 per share represents premium of over 57% to current share price of Rs 127.05 per share as of September 27.
The warrant holders shall be entitled to convert the warrants into equal number of equity shares of face value of Rs 10/- each, on receipt of entire amount in one or more tranches, within a period of 18 months from the date of the allotment.
The money will be used to fund its growth plans, investment in proposed subsidiary/ies, meet long term working capital requirement and improve capital structure.
“The proceeds will be utilised to augment the Net Worth and the capital base of the company required for its business growth, to infuse the funds to the existing or proposed subsidiaries, to meet the long term working capital requirement of the Company and to improve the capital structure of the Company and for general corporate purposes,” said Deepak Chiripal, CEO, Nandan Denim Ltd.
Headquartered in Ahmedabad, Gujarat, NDL has expanded its capacity from 6 MMPA to 110 MMPA over last 12 years.
The company has a capacity expansion plan to strengthen its domestic market share, expand its exports business and have an increased focus on value-added segments.
Post expansion, NDL will become the largest denim manufacturer in Asia and the fourth largest in the World.
In September 2015, Company had issued 25 lakh convertible warrants to FII namely Polus Global Fund which has been converted in to equity shares at Rs 200 per share upon receipt of Rs 50 crore towards the consideration.
As of June 2016, FII & FP held 11.02% in the company while promoter group holding is 58.27%. Post issue of the 50 lakh warrant, holding of FII & FPIs will increase to 19.70% and promoter holding will come down at 52.78%.
Also considering the continuous increase in the holding of FIIs/FPIs and various advantages in attracting institutional investors, company has proposed to increase the aggregate limit for holding shares by the FIIs/FPIs to 49% from 24%.
For FY 2015-16, Nandan Denim Ltd posted net profit of Rs. 63.32 crore on net sales of Rs.
Nandan Denim Limited (NDL), started in 2004, is a part of conglomerate, Chiripal Group, established in 1972 and is currently diversified across several businesses like Textiles, Chemicals, Packaging, Infrastructure and
Headquartered in Ahmedabad, Gujarat, NDL has expanded its capacity from 6 MMPA to the intended capacity of 110 MMPA over the period of last 12 years.
The Company has a manufacturing facility unit near Ahmedabad, Gujarat and exports its denim fabric to over 27 countries.
The company has 3,000 employees.
For the year ended March 2016, company posted net sales of Rs. 1156.72 crore and net profit of Rs. 63.32 crore.