Spencer's Retail (SRL), an RP-Sanjiv Goenka Group company, will launch its first-ever rights issue of Rs 80 crore on 4 August 2020. A rights issue allows a company to raise funds by issuing additional equity shares to existing shareholders at a discounted price.
The company intends to utilize the net proceeds from the issue to meet its working capital needs and other general purposes.
Important details of Spencer's Retail Rights Issue:
- The issue opens on 4 August 2020 and closed on 18 August 2020.
- 1,06,04,563 Rights Equity Shares will be offered for cash at a price of Rs 75 per equity share aggregating Rs 79.53 crore, if fully subscribed. Of the net proceeds, Rs 60 crore will be used to meet working capital requirements and Rs 17.21 crore for general corporate purposes.
- The company aims to collect Rs 80 crore through the rights.
- 2 rights shares will be offered for every 15 shares held by the shareholder as on 29 July.
- The lead manager to the issue is ICICI Securities Ltd.
- Link Intime India Pvt. Ltd. is the registrar to the issue.
- Shares of the company are proposed to be listed on BSE, CSE and NSE.
- Last date for market renunciation by eligible employees is 13 August. Renunciation allows eligible employees to refuse to subscribe to the rights issue and let it lapse.
- The shares will be allotted on 25 August and listed on 27 August.
About the company
Spencer's Retail Ltd is a leading multi-format omnichannel retailer in India. It operates 191 retail stores (including Nature's Basket outlets, which it acquired last fiscal) of various formats in 42 cities across a trading area of 14.60 lakh sq ft. It has presence in the North, East, West and South India, along with an online presence in 17 Indian cities, in Maharashtra, Andhra Pradesh, Telangana, Karnataka, Kerala, Tamil Nadu, West Bengal, Jharkhand, Haryana, Uttar Pradesh, Uttarakhand and Delhi.
Spencer's reported a net loss of Rs 57 crore and a total income of Rs 2,403 crore, on a standalone basis for the financial year ended March 2020. However, the business has remained EBITDA-positive, with around 4.6 percent margins. EBITDA is earnings before interest, taxes, depreciation, and amortization.
The company's net consolidated debt was at Rs 191.5 crore at the end of the year which it said "was comfortable with timely repayments" given its consolidated turnover of around Rs 2,640 crore.
"Our principal business strengthening initiative during FY20 was the acquisition of Nature's Basket. This gave us an entry into Mumbai and the western part of India, opening up a significant growth region for us," Sanjiv Goenka, Chairman said in his shareholders' address.
"By the close of the financial year under review, the operating cost structure at Nature's Basket had improved considerably and the company reached our desired negative working capital position," Goenka said.
Shares of Spencer's Retail Limited closed 2.07 percent lower at Rs 82.20 apiece on NSE.