Centrum Capital plans to raise up to Rs 500 crore in equity via QIP

Nischal Maheshwari, CEO, institutional equities, Centrum Broking
Centrum Capital (CCL) plans to raise up to Rs 500 crore in equity capital from institutio­nal investors to fund organic and inorganic opportunities.

The board approved an enabling resolution proposal to issue equity shares through qualified institutional placements (QIPs) for an amount of up to Rs 500 crore.

This is subject to regulatory and shareholders’ approval, the company said in a filing with the BSE. Its stock closed 9.9 per cent lower at Rs 47.5 per share on the exchange.

The board also gave nod to the issuing of non-convertible debentures (NCDs) of up to Rs 1,000 crore. The debentures could be issued in one or more tranches.

Company executives said it would like to be ready for new business opportunities and an enabling resolution helps tap investors in the shortest possible time. However, at present, there are no concrete plans on deployment. This money will not be used for starting a small finance bank (SFB) in joint venture with Bharat-Pe.

The board also decided not to recommend a dividend for financial year 2020-21, af­ter taking into consideration the impact of the pandemic on the economy and the need to conserve resources.

Meanwhile, Centrum Capital posted a consolidated net loss of Rs 5.54 crore for the fourth quarter ended March 2021 against a profit of Rs 25.05 crore in the same quarter of the year ended March 2020. Its total income, on a consolidated basis, rose to Rs 148.38 crore for Q4 of FY21 from Rs 125.55 crore in Q4 of FY20.

For the full year of FY21, consolidated loss stood at Rs 41.8 crore on income of Rs 513.14 crore against a profit of Rs 70 lakh on income of Rs 480.47 crore in FY20, according to the filing with the exchange.

Last week, the Reserve Bank of India (RBI) gave “in-principle” nod to Centrum Financial Services (CFSL), a unit of CCL, to set up an SFB. The SFB, being set-up jointly with its partner BharatPe, a payments system company, will infuse Rs 1,800 crore. It will take over the beleaguered Punjab and Maharashtra Cooperative (PMC) Bank.

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel