Hindalco Industries, India’s largest metals company and A V Birla group flagship, will make a preferential allotment of shares and warrants worth Rs 2,600 crore to the promoters. The preferential allotment will take the A V Birla group’s shareholding to 35.5 per cent from the current 26.5 per cent.The company’s board approved the issue in a meeting held on Friday evening. Hindalco stated it will issue up to 67,500,000 equity shares of Re 1 each not exceeding Rs 1,200 crore.It will also issue 80,000,000 warrants entitling the holder of warrant to apply for and obtain allotment of one equity share against each warrant not exceeding Rs 1,400 crore.The board has called for an extraordinary general meeting on March 28 to seek shareholders approval. Although the company refused to divulge details on the funds will be used, analysts claim that the money will go to fund the $6 billion acquisition of aluminum sheet maker Novelis. Kumar Mangalam Birla has been progressively hiking his stake in Hindalco through the creeping acquisition route for the past two years. The promoter shareholding which stood at 17 per cent two years back has now reached a comfortable 26.5 per cent. With the proposed preferential allotment, Birla will consolidate his holding in the group flagship further.
