Pantaloon Retail, India’s largest listed retailer, raised Rs 500 crore by selling 15.8 million equity shares to investors at Rs 316 a piece.
The grapevine has it that, leading mutual funds as well as domestic institutions have participated in the issue. The company was granted approval by the shareholders to raise around Rs 1,000 crore by sale of shares. A source said, “We still have time to raise (all the) funds, we will do so at a later date.”
The QIP proceeds are supposedly going to be diverted towards fund expansion and repayment of debt.
The company has nearly Rs 3,800 crore of debt on the books, with a debt to equity ratio of 1.2. The management is planning to reduce this to 0.8 after the fund-raising exercise.
Analysts claim that fund raising seems to be crucial as the company is in desperate need of money for its expansion plans. The company had scaled down its expansion in FY 2009, which ends on June 30, due to high cost of capital.