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Polus Global Fund invests Rs 50 crore in Nandan Denim
22
Sep '15
Deepak Chiripal
Deepak Chiripal
Nandan Denim Limited (NDL) will issue 25 lakh fully convertible warrants to UK-based foreign institutional investor, Polus Global Fund to raise a total of Rs 50 crore.

In a press release, India’s second and world’s fifth largest integrated denim fabric producer said the warrants will be converted into equity shares at Rs 200 per share within 18 months time.

The conversion price of Rs 200 per share is at over 70 per cent premium to September 18 closing price of Rs 115.50 per share on BSE and 250 per cent premium to the book value of Rs 57 per share.

Nandan Denim will seek shareholders’ approval for this preferential allotment at its upcoming Annual General Meeting (AGM) on September 29, 2015.

“The UK-based FII currently holds 1.35 lakh shares or 0.30 per cent stake currently in the company which will increase to 26.3 million shares or 5.48 per cent post conversion of the warrants into equity shares,” NDL added.

The warrant holder will have to pay an amount equivalent to at least 25 per cent or Rs 12.5 crore of the consideration on or before the allotment of warrants while balance 75 per cent shall be payable on or before the time of exercise of the warrants i.e. within 18 months.

Polus Global Fund is registered in the Republic of Mauritius and is managed by Fidelis Trust & Corporate Services Limited having category-1 global business license.

The fund has made strategic investments in other Indian entities like Zee Learn Limited, Omaxe Limited, Archies Limited, ERA Infra., Engineering Ltd, Gujarat Apollo Industries Ltd, IDFC Limited, Mandhana Industries Limited, etc.

CEO Deepak Chiripal said, “The company will use the fresh funds for its expansion project and having attained global scale, we now aim to internalise the global way of doing business.”

“We wish to sustain our efforts on our quality and commitment level across the board,” Chiripal too added.

Nandan Denim is in the middle of its capex execution with outlay of Rs 612 crore for expansion of denim fabric manufacturing capacity, spinning capacity and shirting capacity.

The CAPEX has a requirement of equity funding to the tune of 30 per cent and this equity infusion, coupled with the internal accruals would balance the funding while the external funds have already been tied up.

NDL at its board meeting on April 29, 2015 approved infusion of capital through issue of convertible warrants to promoter & non promoter group for an amount not exceeding Rs 100 crore.

As required under the SEBI (ICDR) Regulations, the allotment of warrants pursuant to the special resolution shall be completed within a period of fifteen days from the date of annual general meeting.

NDL commenced its operations in 1994 with textile trading business and forayed into textile manufacturing in 2004 and currently engages in manufacturing of denims, cotton fabrics and khakis.

In the interim, NDL has expanded its capacity from 6 MMPA to the intended capacity of 110 MMPA over the period of last 10 years.

The company is listed on BSE and NSE and for the year ended March 31, 2015, NDL posted net profit of Rs. 51.4 crore on net sales of Rs. 1,096.5 crore. (AR)

Fibre2fashion News Desk - India

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