The proceeds from the issue will be used to pre-pay debt, which will help strengthen the balance sheet and reduce interest cost, MSSL said.
"The strong response to the NCD
issue showcases the trust of investors in the abilities and growth prospects of the company," MSSL Director Vaaman Sehgal said.
The company’s stock has surged 20 per cent over the past week on expectations of revenue recovery and lower losses at its greenfield plants. While consolidated revenue in the June quarter was down 49 per cent over the year-ago levels, the company expects the sales trend to improve and reach pre-Covid levels by the December quarter. With demand improving, capacity utilisation at most of its plants is at 50-75 per cent.
Despite revenues falling 40 per cent on a sequential basis, losses at the company’s greenfield global plants have come down. This was led by fixed cost optimisation and productivity gains.
Analysts at ICICI Securities say that greenfield plant loss has been one of the key monitorables for the Motherson stock and this has shown marked improvement.
The company will use the funds primarily to refinance its debt, said Chief Financial Officer G N Gauba.
“It’s a new set of investors. It also creates a market benchmark. It also helps in terms of future issue as we have set the benchmark. Unlike many other issuance where there one two investors this was widely distributed. It will lead to better trading. ” said Kunal Malani, head of group strategy.