RCom Raises Rs 4800 Crore Through Sale Of Shares

Anil Ambani’s Reliance Communications (RCom) has raised Rs 4,800 crore from institutional investors by issuing fresh shares against its original target of Rs 3,000 crore. The company will use the proceeds from this qualified institutional placement (QIP) to reduce high-cost rupee debt by around Rs 4,500 crore, as per a media report.

RCom’s QIP got an overwhelming response from investors and was subscribed four times the original size of Rs 3,000 crore as planned by the company.

A major part of the amount raised through the QIP (around Rs 4,500 crore) will be used to repay high-cost rupee debt and deleverage the company's books while the remaining amount will be used for working capital requirements. Following this, the promoters’ stake in the company will come down from 67% to 60%. RCom had a net debt of Rs 40,178 crore as on March 31, 2014, which is 3.38% more as compared to the previous year.

Around 80% of the contribution to the QIP came from foreign institutional investors including US funds.

RCom’s plans to raise funds by selling assets had not paid off in the past.