Cholamandalam Investment launches Rs 4,000-crore QIP

On August 5, Moneycontrol was the first to report that Cholamandalam Investment was planning to launch a QIP in September to raise upto Rs 4,000 crore and had picked 3 i-banks as advisors for the proposed deal.

Murugappa Group-backed Cholamandalam Investment and Finance Company Ltd. announced on September 28 that its board has approved a proposal to raise upto Rs 4,000 crore via a QIP (qualified institutional placement).

The QIP will be split into an equity component of Rs 2,000 crore and Rs 2,000 crore in Compulsory Convertible Debenture (CCD), according to sources.

For the CCDs, the floor “based on the pricing formula as prescribed under Regulation 176(1) of the SEBI ICDR Regulations is Rs 1,200.51 per Equity Share (“Equity Floor Price”) and Rs 1,200.51 per Equity Shares to be issued on conversion of CCD (“CCD Floor Price” and together with Equity Floor Price shall be referred as “Floor Price”),” Cholamandalam Investment said in an exchange filing.

“Further pursuant to Regulation 176(1) of the SEBI ICDR Regulations, the Company may, at its discretion, offer a discount of not more than 5% (five percent) on the Floor Price so calculated for the Issue.”

On August 5, Moneycontrol was the first to report that Cholamandalam Investment was planning to launch a QIP in September to raise upto Rs 4,000 crore and had picked 3 i-banks as advisors for the proposed deal.

The maturity date for compulsory conversion of each CCD shall be September 30, 2026, Cholamandalam Investment said. Each CCD will bear interest at the rate of 7.50% per annum calculated on the face value of the CCD commencing from the date of allotment and until the conversion date.