Hindalco to revive its QIP plans

Hindalco Industries Ltd. limited is supposedly going ahead with their plan of raising funds by selling shares to institutional investors, said bank sources who are dealing directly with the case.

Hindalco had planned to initiate the qualified institutional placement (QIP) issue long back but deterred the plans due to poor market sentiment post the cancellation their coal blocks by the Supreme Court. Now the company plans to launch the QIP in December or January after the coal matter is resolved.

One of the bankers said that the company hopes to raise INR 3,000 crores in the first phase of the program. Company officials however declined to comment on the issue. Hindalco had informed the stock exchanges on 18 July that they would be raising INR 5,000 crore.

Several banks have been hired by the company to initiate this grand sale including hired Bank of America Corp., Citigroup Inc., Deutsche Bank AG, HSBC Holdings Plc, JM Financial Ltd, Kotak Mahindra Capital Co. Ltd, Morgan Stanley, Standard Chartered Plc and SBI Capital Markets Ltd according to Bloomberg’s September 9 report. However plans were stalled soon after due to the seized coal mines.

The Supreme Court had cancelled 214 coal field allocations deeming them illegal out of which 5 belonged to Hindalco. The Court also imposed a one time levy on companies whose allocations had been cancelled and Hindalco says that sum can amount to approximately INR 500 crore.

There was a lot of uncertainty revolving around the industry after that. However, now after the government announced that the seized mines would be auctioned over the next three months, the air seems to have cleared considerably.