New Delhi, Mar 29: Mahindra and Mahindra Ltd, India's biggest tractor and utility vehicle maker, said on Monday its board had approved a plan to raise $100 million in long term funds through an issue of foreign currency convertible bonds. The money will be used to fund growth and acquisitions in its automobiles, tractors and the emerging auto-parts businesses, Bharat Doshi, Mahindra's executive director for finance, said in a statement.
It said it could retain up to 15 percent over the target amount, if it got excess bids.
"The FCCBs will have an appropriate conversion premium to the market price of M&M shares at the time of launching the issue," the statement said.
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Bombay-based Mahindra has a 27 percent share of the Indian tractor market, the world's biggest by number of tractors sold.
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It mainly competes with the Indian unit of Japan's Toyota Motor Corp and local firm Tata Motors Ltd in the utility vehicles market.
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The company also said its board approved a hike in the investment ceiling for foreign institutional investors (FIIs) to 35 percent of the company's equity from 24 percent. It said FII holdings currently stood at 22 percent. Mahindra has been helped this fiscal year by a surge in Indian auto sales and a rebound in tractor demand after the best monsoon in a decade in 2003.
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Industry sales of utility vehicles in the first 11 months of 2003/04 (April-March) have jumped 32.4 percent from a year earlier to 131,381 units.
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Bureau Report