Sparks fly as molten steel is poured from a ladle at an arc furnace in the steel melting shop of the JSPL plant in Raigarh, Chhattisgargh, India. (Photographer: Udit Kulshrestha/Bloomberg)

JSPL Looking To Raise Up To $200 Million Via Institutional Share Sale: Exclusive

One of India’s leading steel makers, Jindal Steel & Power Ltd., promoted by Naveen Jindal, is said to be looking to raise upto $200 million or close to Rs 1,250 crore via a qualified institutional placement or share sale to institutional investors.

The debt-laden company aims to use most of the issue proceeds to pare debt, two people close to the development told BloombergQuint on the condition of anonymity. JSPL’s total debt, according to data complied by Bloomberg, stood at Rs 23,689 crore, as Dec. 31, 2017.

The company’s total revenue for the third quarter rose 21 percent to Rs 6,993 crore as compared to the same period last year, according to its financial statements. Net loss narrowed to Rs 448 crore from Rs 1,101 crore year-on-year. Finance costs for the quarter rose to Rs 967 crore.

SBI Caps is said to the investment banker to the QIP issue.

The pricing of the issue is likely to be close to the current market price. The two-week average price is Rs 230-235 range on which a maximum discount of 5 percent can be offered, as per guidelines of the Securities and Exchange Board of India.

The share placement is intended to raise upwards of Rs 1,000 crore, but the quantum of fund raising depends on the demand and response from institutional investors, said one of the sources quoted above. The company board will meet on March 16 to decide on the QIP, it said in a stock exchange filing earlier.

Shares of JSPL have risen over 80 percent in the last 12 months after the company took measures to deleverage its balance sheet. These include both asset sales and equity fund raising to pare debt. In November 2017, the company allotted 4.8 crore convertible warrants to a promoter entity which will help raise nearly Rs 670 crore on full conversion into equity shares.

JSPL said in an emailed response to BloombergQuint that it has “nothing more to share beyond filings already made on stock exchanges”.