Nandan Denim Limited (NDL) will issue 25 lakh fully convertible warrants to UK-based foreign institutional investor (FII), Polus Global Fund to raise a total of Rs 50 crore.

In a press release, India’s second and world’s fifth largest integrated denim fabric producer said the warrants will be converted into equity shares at Rs 200 per share within 18 months’ time.

The conversion price of Rs 200 per share is at over 70 per cent premium to September 18 closing price of Rs 115.50 per share on BSE and 250 per cent premium to the book value of Rs 57 per share.

“The UK-based FII currently holds 1.35 lakh shares or 0.30 per cent stake currently in the company which will increase to 26.3 million shares or 5.48 per cent post conversion of the warrants into equity shares,” NDL added.

The warrant holder will have to pay an amount equivalent to at least 25 per cent or Rs 12.5 crore of the consideration on or before the allotment of warrants while balance 75 per cent shall be payable on or before the time of exercise of the warrants i.e. within 18 months.

The fund has made strategic investments in other Indian entities like Zee Learn Limited, Omaxe Limited, Archies Limited, ERA Infra., Engineering Ltd, Gujarat Apollo Industries Ltd, IDFC Limited, Mandhana Industries Limited, etc.

CEO Deepak Chiripal said, “The company will use the fresh funds for its expansion project and having attained global scale, we now aim to internalise the global way of doing business.”