Hindustan Construction Company Launches Rights Issue

Hindustan Construction Company Ltd (HCC Ltd) has announced a Rs 350 crore rights issue. The subscription for the rights issue will open on March 26, 2024, and close on April 05, 2024. The company will issue 16.67 crore equity shares with a face value of Rs 1 per share at Rs 21 per equity.

Objectives:

The company plans to use the money it raises from the offering to strengthen its financial foundation, pay down debt to save on interest costs and cover general business expenses.

Eligibility:

To participate in the rights issue, the shareholder must own the company’s share as of the record date. The shares become ex-rights one day before the record date. If you buy shares on or after the ex-date, you can’t apply for the rights shares. It is because it takes t+2 days to deliver the equities to the investors’ Demat, and you’ll not qualify as an existing shareholder on the record date.

Important dates:

Should you subscribe?

Whether or not to subscribe to the rights share is a personal investment decision. If you don’t want to buy the rights shares, you can let your rights expire. But it is not usually recommended. If you ignore the offer, your shareholding will be diluted due to the extra shares issued by the company.

As of March 13, 2024, HCC Ltd’s share Price at the BSE stock exchange is Rs 32.1, meaning the rights issues will be available at a discounted price.

Company Overview:

HCC Ltd is the main company of the Hindustan Construction Company Group (HCC Group). It’s involved in building important things like dams, tunnels, bridges, power plants, roads, and more across India. The HCC Group has four main areas of business: construction, infrastructure, real estate, and urban development. HCC handles the construction part, while its subsidiaries manage the other activities. It’s one of the oldest infrastructure companies in India, started by Mr. Seth Walchand Hirachand.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.