Now Reading: Gabriel India board approves ₹1,000 crore NCD issue
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Gabriel India board approves ₹1,000 crore NCD issue
Gabriel India's board has approved raising up to ₹1,000 crore through private placement of senior, unsecured, non-convertible debentures (NCDs). The issuance consists of 1,00,000 debentures with a face value of ₹1,00,000 each.…
Gabriel India's board has approved raising up to ₹1,000 crore through private placement of senior, unsecured, non-convertible debentures (NCDs). The issuance consists of 1,00,000 debentures with a face value of ₹1,00,000 each. The board also constituted a Finance Committee to handle pricing, tenure, and allocation for the debt issue.
This fundraising follows shareholders approving a ₹1,600 crore borrowing limit at the company's Annual General Meeting. The proceeds are intended for strategic acquisitions under 'Project Jupiter,' including a 28.99% stake in HL Mando Anand for ₹2,231 crore and a 30% stake in HL Klemove India for USD 98.44 million. The debt will increase Gabriel's debt-to-equity ratio to approximately 1:1, a sharp rise from its historical sub-0.2 level. CRISIL recently upgraded the company's long-term bank facilities rating to AA+/Stable.
The newly formed Finance Committee will determine the coupon rate and other terms of the NCDs. Gabriel India also recently completed a preferential allotment of 14,404,204 equity shares to promoter group Asia Investments Pvt Ltd at ₹1,305.89 per share, raising ₹1,881.03 crore.
Indian Opinion Analysis
Gabriel India has historically run a near-debt-free balance sheet, with a debt-to-equity ratio consistently below 0.2. Moving to a 1:1 ratio by raising ₹1,000 crore through NCDs marks a dramatic shift in financial strategy. The funds are tied to 'Project Jupiter,' which involves acquiring a 28.99% stake in HL Mando Anand for ₹2,231 crore and a 30% stake in HL Klemove India for USD 98.44 million. These acquisitions aim to diversify Gabriel from a single-product shock-absorber maker into a supplier of ADAS and steering-braking platforms. The key metric to watch is the coupon rate the Finance Committee sets on the NCDs, which will determine the cost of this leverage. If integration succeeds, the company could enter higher-margin segments of the auto-components market, but near-term EBITDA margin pressure, down to 8.7% in Q1 FY27 from 9.6% a year earlier, will test investor patience. The next trigger is the closing of the HL Klemove stake deal.
Source: sahi.com
This story was synthesised by AI from the source linked above.
