Shares of Hindustan Construction Company (HCC) soared 12 percent intraday on Tuesday after its realty arm Lavasa Corporation has received market regulator Sebi's approval for raising Rs 750 crore through an initial public offer (IPO).
The company had filed its draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (Sebi) in July this year for the proposed public offer.
Sebi issued its final observations on the draft offer documents on November 7. Sebi's observations are necessary for the companies to launch any public offer.
Prior to that, Sebi had sought clarification on two instances from Lavasa's lead manager, Axis Capital Ltd, regarding the company's proposed IPO.
The company, which is developing a large township (hill city) in 10,000 hectares in 'Lavasa' near Pune, is making a second attempt to raise money though IPO.
This is the company's second effort to hit the capital market. In November 2010, Lavasa had got the Sebi clearance for an IPO to raise up to Rs 2,000 crore, but bad market conditions forced the company to scrap the plan.
As per initial papers, Lavasa plans to launch an IPO of its equity shares of Rs 10 each aggregating to Rs 750 crore. The proceeds from the current issue would be used to fund the company's growth.
The HCC group, which has 68.72 percent stake in Lavasa, had said that proposed public issue is subject to receipt of requisite regulatory approvals, market conditions and other considerations.At 09:23 hrs HCC was quoting at Rs 37.40, up Rs 3.30, or 9.68 percent on the BSE.(With inputs from PTI)
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