Alok down by 3.5%; bigger rights issue fails to cheer

Shares of textile major Alok Industries were down 3.5% at Rs 19.30 in a bullish market. The company's board on Saturday, cleared a proposal to expand the rights issue size to Rs 450 crore, from Rs 300 crore earlier.

Alok's plan to hike the size of the rights issues at a time when many companies have had to prune or shelve their fund raising plans, due to tight market conditions.

Alo Industries chief financial officer Sunil Khandelwal is hopeful that the issue will get a good response.

"Market sentiment is improving. We have got interested investors lined up, and we plan to price the rights issue attractively," Mr Khandelwal told ET. The stock is up 12% over the last week. Brokers do not expect big gains near term because of the bearish outlook on the sector as a whole.