Ashok Leyland rallies over 2%, hits 52-week high on fund raising plans

NEW DELHI: Ashok Leyland Ltd surged as much as 2.3 per cent in trade to hit its fresh 52-week high of Rs 39 in trade on Thursday, on reports that India's second-largest truckmaker, is planning to raise about Rs 600 crore to Rs 700 crore through an qualified institutional placement to pare debt.

Ambit, Kotak Mahindra, and Citigroup have been appointed bankers for this transaction.

At 09:35 a.m.; Ashok Leyland was trading 1.7 per cent higher at Rs 38.75. It hit a low of Rs 38.40 and a 52-week high of Rs 39 in trade today.

ET learns that the fund raising is likely to be concluded in the next couple of weeks.

People close to the company told ET, the QIP may lead to the equity dilution of 6.1% in the company, which will bring down promoter's stake down to 39% from 41.25% in March-2014, according to BSE filing.

Despite the stake dilution in the company, experts say the move will hardly make a difference to its overall debt which stands at Rs 3,883 crore. At best, it may ease the debt burden by 15-20 per cent, said the report.