Right issue impact on Hindalco

Hindalco's right issue opens for subscription on September 22 and closes on October 10. The rights priced at Rs 96 per share, is in the ratio of three shares for every seven shares held, or 3:7. The flagship company of the Aditya Birla Group plans to raise Rs 5, 048 crore via the issue.India's biggest aluminium maker is looking to re-finance the USD 3.03 billion bridge loan taken to buy Novelis. The bridge loan needs to be refinanced by November. The remaining money is to be financed through debt.However, the market is concerned with the timing of issue. Investor sentiment is also weak. So, based on these factors, the issue may be undersubscribed due to current market conditions.Hindalco Chairman Kumar Mangalam Birla has reassured shareholders that the issue is safe. "The right issue is priced attractively. Of the total offering, 90% has been underwritten. About 5I bankers will underwrite the issue.".NS