 "Chart: The market hero today has jumped 162% in 1 yr")
Amtek India has jumped four percent today to Rs 102 on the bourses after it announced that it has raised Foreign Currency Convertible Bonds (FCCBs) worth $130 million. These bonds, which will bear a coupon of 6 percent payable on a semi-annual basis, have a maturity of 5 years and 1 day and are due in 2017. They are also convertible at the initial conversion price of Rs 103.005 per equity share. The company has raised these funds for future acquisitions and capital expenditures.
According to the press release , the FCCBs are expected to be issued and settled on or around 5 April 2012 and will be subsequently listed on the Singapore Exchange Securities Trading Ltd, subject to receipt of approval from the SGX-ST.
Earlier this month, even United Spirits, Vijay Mallya’s flagship company had announced that it is planning to raise up to $225 million via the FCCB route and has also decided on Singapore for its listing.
Powered by TableauFCCBs are generally raised by companies as they want to access debt at low rates. Most companies ended up raising huge amounts of money via the FCCB route when the stocks markets were at their peak during 2007-2008. The companies hoped that if stocks stayed high, these bonds could be converted at huge premia.
However, as the markets crashed, these instruments failed to help Indian companies. According to a Fitch report, 59 companies are expected to face redemption this year and 20 percent (12 companies) are likely to default.
Here are some facts about the company
•Stock has risen by 162.9 percent in the last one year vis Sensex fall of 3.2 percent.
•For the nine months ended December 2011, Amtek India reported a 39.4 percent growth in sales and 44.6 percent growth in profit.
•The company’s total debt stands at Rs 2,067 crore and has cash of Rs 469 crore as of the December quarter.
•Company specializes in making components for two/three wheelers, cars, tractors, light commercial vehicles, heavy commercial vehicles and stationary vehicles.
•Promoters have a 64.64 percent stake in the company followed by FIIs (15.56 percent) and DII (3.5 percent) as on September quarter.