Price of the rights issue has been fixed at Rs 81 per share. Around 13 crore shares would be issued to existing shareholders for a total amount of Rs 1,050 crore.
The board committee had fixed the entitlement ratio for the rights issue at 5:46 which means eligible equity shareholders will receive five rights shares for every 46 ordinary shares they hold as of the record date.
Assuming full subscription of the rights issue, the company’s outstanding fully-paid equity shares would reach 132.3 crore compared to 119.3 crore shares prior to the issue.
Proceeds from the rights issue will be used to reduce debt as well as general corporate purposes. Piramal Pharma has debt of around Rs 4,800 crore on its books.
Analysts at Nuvama last month had stated that they expect a strong recovery in the company’s overall business and projected a potential upside of 41 percent to the stock price.
Nuvama said that a recovery in demand for legacy products in its core markets like the US, capacity expansion by the company and better cash flows after the Rs 1,050 crore rights issue will boost the operating profits.
