Havells Indias foreign direct investment (FDI) proposal of infusing equity shares and warrants worth Rs 278 crore in the Indian market has been approved by the Foreign Investment Promotion Board (FIPB).
However, this has come with a rider stating that the company will have to obtain licence from the Department Of Industrial Policy And Promotion (DIPP) and undertake 50% export obligation on manufacturing items reserved for the small-scale sector.
The riders have been introduced on the insistence of the ministry of micro, small and medium in a bid to protect the interests of those sectors. All other ministries and departments including the DIPP, commerce, revenue and economic affairs, had given the project its nod.
The approved proposal consists of 41,60,000 equity shares of Rs 5 each at a price of Rs 625 per share, aggregating to Rs 260 crore and 26,00,000 warrants convertible into shares at Rs 690 per warrant, aggregating to Rs 17.94 crore. The issued warrants are convertible into equity shares of Rs 5 each on or before the expiry date fixed at 18 months from the date of their allotment.
The investors equity shareholding in the company constitutes around 7.18% of the companys post-issue paid-up equity share capital. Upon exercise of all warrants, the investors equity shareholding in the company will constitute around 11.17% of the companys post-issue post-conversion paid-up equity share capital. The investor has not exercised any warrants so far.
Total non-resident shareholding before the issue of subscription was 19.06%, which has moved to 24.88% after subscription but before conversion of warrants. The resident shareholding was 80.94% before the issue, whereas post-subscription, it stands at 75.12%. Post-conversion, non-resident shareholding has increased to 28.10% and the resident shareholding is 71.90%.