The Hindu Business Line : Suryavanshi Spinning `realigning' to pref offer price levels

SURYAVANSHI Spinning declined further today ahead of its EGM on February 22. The stock had scaled its 52-week high at Rs 98.05 on the BSE on January 27 on expectation of a preferential issue with a premium.

The company has since made a preferential allotment of shares to non-promoters to raise funds for expansion at a price of Rs 87 per share with a premium of Rs 77 a share. The EGM is to approve the proposal.

The stock closed at Rs 77.5 against Friday's close of Rs 78.50 on the BSE and about 1,700 shares were traded against the two-week average quantity of over 11,000 shares.

According to market sources, the market had overshot the valuation, which was determined later. "The current decline is largely because of the realignment," a stock analyst said.

Mr R.K. Agarwal, Joint Managing Director of the company told Business Line that Rs 13 crore raised from the placement would be used to add 35,000 spindles at a separate unit in Andhra Predesh at a cost of Rs 47 crore and also for repayment of high cost debt.

Post-preferential issue, the paid-up capital of the company would go up to Rs 7.15 crore from Rs 5.65 crore.

Among several buyers, IDBI has picked up 10 lakh shares (or around 13 per cent of the post issue paid-up capital), while an FII lifted 75,000 shares of the company through the preferential route.

Mr Agarwal said the debt restructuring would cause an interest cost saving of Rs 1.50 crore per annum.

The total placement proceed is expected to come by the end of this month.

The company has also initiated steps to integrate the group's garment manufacturing business with it.

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