Birla Global Finance board approves preferential issue

20 July, 2004
Mumbai

Birla Global Finance Limited (BGFL) report that their directors have approved the preferential issue of 1,00,00,000 (One crore) equity shares of Rs. 10 each at a price of Rs. 40 per share (aggregating to Rs. 40 crores) to the promoter group company.

The offer price range represents a substantial premium over the average traded prices of the Company's shares on the stock exchange in the past. The average of weekly high and low of the traded closing price during the last two weeks and six months was Rs. 28.20 and Rs. 34.51 and the effective margin is 42 per cent and 16 per cent respectively on the offer price of Rs. 40. The closing price on National Stock Exchange as on 16 July, 2004 was Rs. 31.55 and the effective margin is 27 per cent on the offer price of Rs. 40.

The proceeds of the above issue shall be utilised for the fund based activities of the Company and it will enhance its net owned funds. After the proposed issue, the paid up equity capital of the Company will increase from Rs.15.75 crore to Rs. 25.75 crore and networth from Rs. 58.91crore (as on 31 March, 2004) to Rs. 98.91 crore, respectively.

BGFL is the financial services flagship Company of the Aditya Birla Group and is engaged in the corporate finance and capital market activities. For the year ended 31 March, 2004, the Company had a net income of Rs. 56.81 crore and profit after tax was Rs. 3.12 crore. The Company had declared a dividend of 10 per cent for the year ended 31 March, 2004. The Company has a rating of "A1+" by ICRA on its short term borrowing programme.