Prakash Inds allots warrants to Barclays

New Delhi-based diversified company Prakash Industries on Monday announced preferential issue of warrants worth Rs 44.44 crore to Barclays and a few domestic investment firms.

The Rs 1,000-crore firm said it would allot 5.55 million warrants to Barclays and "others", subject to the permission of its shareholders. The warrants would be priced at Rs 80 apiece and they could be converted into equal number of equity shares within 18 months.

Last year, Prakash Industries posted a net profit of Rs 133 crore on a turnover of Rs 1,048 crore. It is engaged in the steel, power, PVC pipes and black and white picture tubes businesses.

The company did not divulge the identity of other investment companies.

When contacted, Prakash Industries' company secretary Manoj Kumar Agarwal said they would furnish other details to the stock exchanges later. Agarwal declined to comment on the speculation that a big conglomerate was among the investment companies subscribing to the preferential issue.

According to Agarwal, the company would seek the shareholders' permission on the proposed transaction at an extra-ordinary general meeting on September 19.

Under the capital market regulations, the investors will have to fork out 10 per cent of the total investment at the time of subscription of the issue and the remaining 90 per cent at the time of conversion.

Post conversion of the warrants, the promoters' stake in the company will come down. However, the exact details of the promoters' shareholding, post conversion of warrants, could not be ascertained. Agarwal said, "We will inform the details in the notice of the EGM." The promoters now hold 67 per cent, he said.

Share prices of Prakash Industries jumped 5 per cent - the maximum permissible increase of the stock in a trading session - to Rs 87.70 on the BSE.