New Delhi: Realty firm Mahindra Lifespace Developers has received capital markets regulator Sebi's approval to raise up to Rs 300 crore through rights issue. In a rights issue, shares are issued to existing shareholders as per their holding at a pre-determined price and ratio.
The company had filed draft papers with Sebi in January to raise funds through rights issue and the regulator issued its 'observation' on March 2, which is necessary for any firm to launch public offer, as per latest update with Sebi.
Going by the draft papers, Mahindra group's realty firm would issue "equity share for an amount up to Rs 300 crore on a rights basis to the eligible equity shareholders". Proceeds from the issue will be primarily used for redemption of non-convertible debentures.
ICICI Securities Ltd is the sole book running lead manager for the offer. Besides, three firms -- Vardhaman Special Steels, Intellect Design Arena and ZenoTech Laboratories -- have also sought approval of Securities and Exchange Board of India (Sebi) to raise funds through rights issue.
According to market experts, market stability could be a reason why companies are opting for equity issuance to existing shareholders. Last year, companies mopped up a total of Rs 1,230 crore via rights issue mode.
