Himachal Futuristic Communications Limited (HFCL) has raised Rs 6 billion via qualified institutional placement (QIP) issue. The QIP witnessed response from the institutional investors like Reliance Ventures, Quant Mutual Fund, IIFL Wealth, Elara India, Discovery, Segantii, Millennium amongst others who participated in the fund raise program of the company.
The QIP proceeds shall be predominantly utilised towards funding of capital expenditure requirements for setting up of new manufacturing facilities, capacity expansions and expenditure on research and development and product development.
Earlier, the board of directors of the company at its meeting had passed an enabling resolution to raise funds by way of private placement or preferential issue or public issue or rights issue or qualified institutional placement or through any other permissible mode and/or combination thereof, which was also approved by the shareholders in their annual general meeting held on September 30, 2021.
The fund raising committee of directors at its meeting approved the issue and allotment of 87,272,727 equity shares of Rs 1 each to 21 qualified institutional buyers at the issue price of Rs 68.75 per equity share (including a premium of Rs 67.75 per equity share), aggregating to Rs 6 billion. The trading of the newly allotted equity shares will commence from December 14, 2021 at the National Stock Exchange (NSE) of India Limited and Bombay Stock Exchange (BSE) Limited.
With the proactive government policies, the company expects the telecom sector to perform exceptionally well with creation of new 5G network and increased in broadband penetration in India which is expected to grow rapidly. Policies like bharatnet (wherein the Government has taken the initiative to connect every village with optical fibre cable), production based incentive (PLI) scheme in telecom and networking products will boost the country’s manufacturing capabilities, exports and promote the atmanirbhar bharat initiative and provide impetus for the development of the telecom sector.
Commenting on closure of QIP issue, Mahendra Nahata, managing director, HFCL said, “HFCL has successfully raised Rs 6 billion via QIP and I am thankful to all the investors for their overwhelming support and faith posed in HFCL’s long term growth strategy. This capital raise will help in accelerating company’s plan for setting up of new manufacturing facilities, capacity expansions, research and development initiatives and new product development. With the establishment of new plant for manufacturing of telecom products and the capacity expansion of optical fibre, optical fibre cable while also augmenting our Goa and Chennai plants, recent strengthening of the global leadership team and our new investments in product development, HFCL is geared up to capitalise on the upcoming growth opportunity in the decade of digital transformation that we are seeing across industry verticals. With the capacity expansion, the company would reap rich dividends in form of revenue, market share and profitability gains. The PLI scheme announced by the government, creation of 5G network, expansion of bharatnet programme, rapidly growing fiber to the home segment and additional spectrum allocation to the telcos are set to amplify our opportunity spectrum. The capital expansion will also help in building up of new plant for the manufacture of products for supplies to defence sector under atmanirbhar bharat and make in India initiatives and will enable the company to capture opportunities in defence segment as well”.
