3 firms approach Sebi with rights issue offer in January

NEW DELHI: As many as three firms, including State Bank of Travancore and Zee Media Corp, approached market regulator Sebi in January to raise nearly Rs 700 crore through rights issue.

Apart from these two firms, Everlon Synthetics Ltd has also filed draft papers with Sebi to mop up funds by issuing equity shares to existing shareholders.

Most of the companies plan to garner funds for repayment of loans and to support working capital requirements.

Individually, State Bank of Travancore plans to garner up to Rs 485 crore through rights issue, Zee Media Corp (Rs 200 crore) and Everlon Synthetics (Rs 3.5 crore).

According to Prime Database, "as of now, the early part of 2015 is likely to see little action on the rights front."

In a rights issue, shares are issued to existing investors as per their holding at pre-determined price and ratio.

In 2014, fund mobilisation through rights issues stood at Rs 5,224 crore, higher than Rs 4,101 crore garnered in the preceding year.

By number, the year witnessed 18 companies using the rights route as compared to 12 firms in 2013.