Hindalco, Tata Motors rights issue in trouble
The recent rights issues from Hindalco and Tata Motors have landed in hot soup following the meltdown in their stock prices in this week.
Hindalco, which was aiming to mop up around Rs.5,047 crore from this issue faced the heat as large institutional investors like LIC (11.13%)and Templeton (3.35%)have decided to stay away given that Hindalco’s share price fell below the offer price of Rs.96, ending the day at Rs.80.65.
You will recall that this issue was underwritten by ABN AMRO, Citigroup, Deutsche Equities, DSP Merrill Lynch, SBI and the promoters.
Similarly, the Rs.4,145 crore rights issue from Tata Motors is also in trouble. The company was offering two classes of shares on offer, priced at Rs.340 and Rs.305, and the current price has slumped below both, to close at 291.45.
As retail investors look set to give this one a miss, the holding firm Tata Sons will buy the unsold shares.
Tough times ahead for both, certainly.
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