MC Interview| Samena Capital commits Rs 500 crore for UGRO Capital's preferential allotment

UGRO CAPITAL

Existing investor and Asia focused investment firm Samena Capital has committed Rs 500 crore for the UGRO Capital’s Rs 914.30 crore fund raising through unsecured compulsorily convertible debentures, managing director, Sachindra Nath told Moneycontrol in an exclusive interview.

He also said that Investment Fund for Developing Countries, investment arm of Denmark government, has also committed Rs 150 crore for rights issue.

Both these companies are existing investors of the company with Investment Fund for Developing Countries holding 16.4 percent stake and Samena Capital holding 7.5 percent stake in the UGRO Capital, according to the investor presentation.

This commitment was made as the board of directors of UGRO Capital on May 20 approved the fund raising of Rs 400 crore through issuance of equity shares by way of rights issue and Rs 914.30 crore via issuance of unsecured compulsorily convertible debentures (CCDs).

The company will issue equity shares of face value Rs 10 each by way of rights issue, to the eligible equity shareholders, and 49,421,464 fully paid-up CCDs, having face value of Rs 10 each to the non-promoter allotees by way of a preferential allotment, as per exchange filing on May 20.

As per latest amendments by Securities and Exchange Board of India (SEBI), which came into effect from April 7, rights issue will need to be completed in 23 days, which is significantly lower than the earlier time period of 45 days. The timeline is measured from when the approval for the rights issue is given by the company's board.

The market regulator had suggested various amendments to make rights issue more attractive than preferential allotment for listed entities. In rights issue, the existing shareholders can participate, while in preferential allotment, the issuer can allot it to selective investors including third-parties/outsiders.

Nath during an interview also said that the fund raising will increase the capital adequacy of the company. “The capital adequacy would enhance from 19.41 percent to 29.4 percent. The regulator wants us to maintain at 15 percent, and we are at 19 percent. If we continue to grow the way we are growing, then we need more capital for regulatory purposes,” he added.