IHCL board approves rights issue

New Delhi: The board of directors of Indian Hotels Company Limited (IHCL) which runs the Taj group of hotels have approved the issuing of equity shares by way of a rights issue to the existing shareholders of the company for raising capital around Rs 1500 crore.


ET was the first to report that IHCL is coming up with a rights issue. In a statement to the BSE, IHCL stated the objective of the rights issue is to meet the company’s long term financing needs for capital expenditure, growth plans, and debt repayment. Sources had told ET that IHCL is coming out with a rights issue to primarily fund the expansion of the Taj Lands End and Sea Rock properties in Mumbai.

According to people familiar with the development, IHCL plans to add around 400-500 keys to these two properties. The IHCL board has also approved the formation of a committee of directors to decide on the terms of conditions of the rights issue including the rights entitlement ratio, the issue price, record date, timing of the rights issue and other related matters.

IHCL’s stock closed at Rs 119.65 on Monday.

In its results for the quarter ended June 30, IHCL posted a profit after tax of Rs 7 crore compared to a Rs 9 crore loss a year ago. It had a consolidated gross debt of Rs 3383 crore as on June30.