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Realty firm Mahindra Lifespace Developers has received SEBI approval to raise up to Rs 300 crore through a rights issue.
In a rights issue, shares are issued to existing shareholders as per their holding at a pre-determined price and ratio.
The company had filed draft papers with the Securities and Exchange Board of India in January to raise funds through a rights issue and the regulator had issued its ‘observation’ on March 2, which is necessary for any firm to launch public offer.
Going by the draft papers, Mahindra group’s realty firm would issue “equity share for an amount up to Rs 300 crore on a rights basis to the eligible equity shareholders''.
Proceeds from the issue will be primarily used for redemption of non-convertible debentures.
ICICI Securities Ltd is the sole book running lead manager for the offer.
Besides, three firms — Vardhaman Special Steels, Intellect Design Arena and ZenoTech Laboratories — have also sought SEBI approval to raise funds through a rights issue.
According to market experts, market stability could be a reason why companies are opting for equity issuance to existing shareholders.
Last year, companies had mopped up Rs 1,230 crore via rights issue.
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