Domestic telecom gear maker HFCL on Tuesday said it has raised Rs 600 crore through the QIP issue, which it plans to use for expanding manufacturing facilities and product development.
The QIP (qualified institutional placement) received responses from various institutional investors like Reliance Ventures, Quant Mutual Fund, IIFL Wealth, Elara India, Discovery, Segantii, Millennium, among others, the company said in a statement.
"HFCL has successfully raised Rs 600 crores via QIP and I am thankful to all the investors for their overwhelming support and faith posed in HFCL’s long term growth strategy. This capital raise will help in accelerating the company’s plan for setting up of new manufacturing facilities, capacity expansions, research and development initiatives and new product development,” HFCL Managing Director Mahendra Nahata said.
The company plans to use the QIP proceeds predominantly towards the funding of capital expenditure requirements for setting up new manufacturing facilities, capacity expansions, R&D and product development.
"With the capacity expansion, the Company would reap rich dividends in the form of revenue, market share and profitability gains."
"The PLI scheme announced by the Government, creation of 5G network, expansion of BharatNet Programme, rapidly growing fibre to the home segment and additional spectrum allocation to the telcos are set to amplify our opportunity spectrum,” Nahata said.
The capital expansion will also help in building a new plant for manufacturing products for supplies to the defence sector under Atmanirbhar Bharat and Make in India initiatives, and enable the company to capture opportunities in the segment, he added.
The proposal to raise funds was approved by the company’s board on September 03, 2021.
Its shareholders cleared the proposal in the annual general meeting held on September 30, 2021.
The fundraising committee of the Board of Directors decided to raise funds through QIP, and the issue was opened on December 06, 2021, and closed on December 09, 2021.
The fundraising committee of directors at its meeting on December 10, 2021, approved the issue and allotment of 8,72,72,727 equity shares of Re 1 each to 21 qualified institutional buyers at the issue price of Rs 68.75 per equity share (including a premium of Rs 67.75 per Equity Share), aggregating to Rs 600 crore.The trading of the newly allotted equity shares will commence from December 14, 2021, at NSE and BSE, the company said.