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Indiabulls Housing Finance has undertaken an initiative to fortify its financial standing by embarking on a rights issue of equity shares with the aim of securing INR 3,693 crore. This decision was approved during the meeting of the board of directors on January 17, 2024 and got the approval from the Securities Issuance and Investment Committee (SIIC) of the Board. The framework of the rights issue entails the issuance of 24.62 crore equity shares at INR 150 per share, marking a 24.6% discount relative to the stock's closing price last Thursday.
Participating shareholders are required to remit INR 50 per equity share during the application process, with the remaining subscription amount slated for payment within 12 months from the allotment date. The record date has been firmly set as February 1, 2024. Starting on Wednesday, February 7, 2024, and ending on Tuesday, February 13, 2024, the rights issue window is primed to welcome stakeholders seeking to participate in this financial initiative. Simultaneously, the on-market renunciation period, spanning from February 7 to February 8, facilitates existing shareholders to sell their rights on the market floor at potentially more advantageous terms.
A rights issue, as a financial strategy, empowers a company to augment its capital reserves by offering additional shares to its existing shareholder base. Eligibility for participation hinges on possessing shares of the company as of the record date.
The provision that these rights shares are made available at a discounted valuation compared to the current market price is a key highlight. In the context of recent fluctuations in the financial markets, Indiabulls Housing Finance maintains an optimistic outlook regarding its trajectory. Despite a marginal 5% dip in its share valuation on Thursday, the company underscores its steadfastness with a substantial 70% surge in performance over the past 12 months, notwithstanding an 8% dip this month.
The decision to embark on this rights issue aligns seamlessly with the company's strategic posture as it endeavors to fortify its financial position and leverage opportune market conditions. This decisive move reflects a proactive response to the evolving financial landscape, demonstrating Indiabulls Housing Finance's commitment to capitalizing on prevailing market dynamics while concurrently reinforcing its fiscal resilience.
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