• Sign Up
  • |
  • Sign In Sign Out
  • |
  • Make us your home
  • |
  • RSS
1 2
1 15
1 35
1 4
1 9
1 13
1 25
1 5015
1 5013
  • For full coverage of Budget 2009, log on to Budget.ndtv.com
  • CUTS BPLR BY 25 BPS TO 12% WITH EFFECT FROM JULY 25
  • EUROPEAN MKTS DROP FOR 3RD STRAIGHT WEEK; DAX DN 1.4% FOR THE WEEK
  • SMS BOS < space > stock query at 56388
  • RIL MOVES SUPREME COURT CHALLENGING BOMBAY HIGH COURT JUDGEMENT
  • RIL ALLEGES THAT BOMBAY HC ERRED IN DECIDING QUANTITY, TENURE, PRICE OF GAS
  • RIL MOVES SUPREME COURT CHALLENGING BOMBAY HIGH COURT JUDGEMENT
  • RNRL FILES PETITION IN SC SEEKING MODIFICATIONS TO BOMBAY HC ORDER
  • RNRL ASKS SUPREME COURT TO DIRECT RIL TO IMPLEMENT BOMBAY HC ORDER
  • For midnight delivery of gifts log onto NDTVgifts.com
  • Free shipping in 500 cities. Log onto NDTVgifts.com
  • Surprise your loved ones with flowers.log onto NDTVgifts.com
  • Email us at buyorsell@ndtv.com
  • Call us at 011-26201171
  • CLB ORDER IN THE MATTER OF MAHINDRA SATYAM EXPECTED ON MONDAY
  • OPEN TO 1-2 GOVT NOMINEES TO BE RETAINED FOR INVESTIGATION PURPOSE
  • MAHINDRA SATYAM BOARD HAS WRITTEN TO CLB TO RECALL GOVT NOMINATIONS
  • BHARTI GETS INTERPRETIVE ORDER FROM SEBI ON WAIVER OF OPEN OFFER
  • ORDER CONDITIONAL ON BHARTI GETTING NOD FOR SCHEME OF ARRANGEMENT BY HC
  • BHARTI WILL NEED SHAREHOLDER APPROVAL FOR SCHEME OF ARRANGEMENT
  • TATKAL BOOKING PERIOD REDUCED TO 2 DAYS FROM 5 NOW
  • TO FORM EXPERT COMMITTEE FOR OPTIC FIBRE CABLE NETWORK
  • PROVISION FOR NEW LINES AT RS.2921CR FROM RS,1100CR
  • RECEIVED INCREASED BUDGETARY SUPPORT BY RS.5000 CR IN FY'10
  • MAMATA BANERJEE: ECONOMIC VIABILITY OF PROJECTS IS NOT THE KEY CONCERN
  • ANNUAL PLAN OUTLAY OF RS.40,740 CR IN FY10
  • TO DEPLOY RS.15675 CR VIA INTERNAL RESOURCES
  • RAILWAY FINANCE CORP TO BORROW RS.9000 CR IN FY'10
  • FY'10 GROSS TRAFFIC RECEIPTS SEEN AT RS.8842 CR
  • EXPECT RS.58500 CR REVS FROM FREIGHT, RS.23400 FROM PASSENGERS IN FY'10
Updated: 31/10/2008 | 11:22 PM IST
What’s wrong with the rights offerings?
Shaili Chopra
Friday, October 31, 2008 (New Delhi)
Comments:
Read (0)

The issues of ‘rights offerings’ have been in the news for quite some time now. With some companies recalling their rights issues and putting their future growth in jeopardy, a few others have promoters who are capturing a majority of their own stock, at a low price.

India’s top conglomerates, Tata Motors and Hindalco, who effected mega mergers and acquisitions (M&As), continue to face a money crunch. In the recent rights issues, both promoters ended up picking a lot of their own shares as investors stayed away.

The Tata Motors promoters put over Rs 3000 crore in the Rs 4145 crore rights offering.

That's 72 per cent of the offer, more than double of what had been underwritten by JM Financial for this issue. The company also revamped its financing pattern several times. The latest was the calling off of the overseas issue offering.

Moreover, the resource crunch indicates that coupled with a downturn in the sector and rising costs it has led to a slowing on planned capex.

Even, Hindalco that declared strong earnings on higher sales, on Friday came out to defend its right issue.

Although the Hindalco issue has failed, the management on Friday said they had a loan of a billion dollars tied up from banks and would meet the residual $1 billion needed to repay its $3.03 billion bridge loan through treasury liquidation.

Besides these two resources seeking corporates, there might be several others planning rights issues.

Malvinder Singh promoted Religare enterprises, launched a rights issue to raise Rs 1800 crore, but even before the investors could consider it, the promoters said upfront that any unsubscribed amount would be picked up by the promoters.

With the markets under pressure, the companies going for right issue are certainly being bold, but the bigger question is whether this is the promoters’ way of just capturing their own stock for much less?

Comments:
Read (0)
Comments
 
Market Watch
         
Graphs
Stocks

                                Moremore
Stock Dashboard
Trading Calls
Simi Bhaumik
Simi Bhaumik
-6.50% status
Current: Rs 151
Stock Recos
The stock has crucial support at Rs 80
The stock has support at Rs 130 and it has resistance at Rs 180
Buy or Sell
Today's Analyst: Ashu Bagri
Query : Rajender Raikwar, an engineer from Shillong, has 10 BEML at Rs 325/share.