Indian Hotels Company Ltd, a Tata group company, has raised $150 million through foreign currency convertible bonds issue, which was oversubscribed by more than 20 times, to fund acquisitions, expansion and modernisation in the country and abroad.
The $135 million issue with greenshoe option of $15 million opened for subscription post trading hours yesterday and received strong demand, IHCL executive director Zubin Dubash told reporters in Mumbai on Wednesday.
The bonds carrying a coupon rate of one per cent are convertible into ordinary shares or global depository shares at conversion price of Rs 502 per share, at 19 per cent premium to IHCL's closing price of Rs 421 on the Bombay Stock Exchange, he said.
The recent upgradation of India's long term foreign currency rating by Moody's helped to get us better rates, Dubash said, adding if all bonds are converted into shares, the equity base would dilute by 30 per cent.
The company has raised Rs 800 crore (Rs 8 billion), including Rs 680 crore (Rs 6.80 billion) through FCCB issues in the current fiscal, he added.
Asked about the utilisation of funds for business plans, he said the resources would be used for upgradaion, expansion of properties and acquisition within the country and abroad.
He, however, declined to elaborate on the future business plans, saying: "We have a pact with bond investors not to speak on plans and use funds for 30 days, he said.
On the extent of investment in upgradation, Dubash said IHCL has been spending Rs 60-70 crore (Rs 600-700 million) annually and would invest similar amount every year in the future.