Hindalco to raise Rs5,000 crore via rights issue

Mumbai: Hindalco Industries, the metals flagship of the Aditya Birla Group, plans to raise up to Rs5,000 crore ($1.2 billion) through a rights issue despite the stock market slide, bankers close to the developments said.

Kumar Mangalam Birla The rights issue will now be priced at Rs96 a share, as against the initial plans for above Rs100, and would be offered in the ratio of 3:7 from the 1:3 proposed earlier, the sources said.

The board of Hindalco is meeting today to finalise the price and ratio, the company said in a filing with the Bombay Stock Exchange.

The issue is expected to open for subscription in September.

The money will be used to repay a $3.03 billion bridge loan it had taken to buy Canada's Novelis in February 2007. The remainder will funded through debt and other instruments, sources said.

Citigroup, Merrill Lynch, SBI Capital Markets, Deutsche Bank and ABN AMRO are advisors to the issue.