ECBs might give companies some breathing room for now, but these borrowings could come at an interest rate of one to five per cent over the London Interbank Offered Rate – the world’s most widely used benchmark for shortterm interest rates. Click here to Enlarge. Given this history, the controversy brewing around Castex Technologies should not come as a huge surprise. In the most likely scenario of “mass” redemptions of FCCBs in , these companies will choose to exercise one or a mix of the options mentioned below: Please find below the full details of the product you clicked a link to view.

No doubt the tardy Indian legal system will work as deterrent for investors who would want to consider filing a winding-up petition. Tax ID No Take the recent case of Castex Technologies Ltd. As markets continue to rattle amid earning season, upcoming elections, volatile crude price and US China trade war, it’s a great idea to add some stability to your portfolio by adding dividend stocks. The thinking was that the since the FCCB crisis was brought on by external factors the global financial crisis , regulatory intervention was justified and needed.

Tax ID No This, in turn, meant that these bonds could not be converted into equity and Indian oon were left staring at huge redemptions. Register Product search Getting started Search for products Try something new. The FCCBs issue was oversubscribed by five times.

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The Vijay Bhambwani Show. Memories of Venus Remedies still worry industry watchers. By continuing to use our site you consent to the use of cookies as described in our privacy policy unless you have disabled them. Bond holders could convert the bonds at any time on or after November 24,but prior to the close of business on September 25, fccn Sales on the other hand came in at Rs m up Their credit analysis of the company should have also thrown up possible risks.


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As a result, there will likely be a negative impact on the capital structure of the issuer companies. The company also fase it has received indicative offers from interested parties seeking to acquire RCOM’s ffccb stake in Reliance Infratel, its telecom tower unit.

In22, crore was raised through such bonds, which rose to 25, crore in With the euro crisis, and the market correction deeper than anticipated, companies are exploring other ways to raise funds.

The Murphy’s law of foreign currency convertible bonds

Nor is it a primary information source. Pay through PayPal Amount to be paid: A winding-up petition is filed to initiate liquidation proceedings against a company.

case study on fccb

And, we will also look at the implications for bondholders. The bonds are set to mature in June and October The conversion price at which the bond will be changed into shares is decided beforehand.

case study on fccb

In fiscal yearWockhardt had posted a loss of Rs. Although FCCB issuances fell, instances of trouble caused by these instruments kept cropping up. You can change your cookie settings at any time but parts of our site will not function correctly without them.


case study on fccb

This stock of FCCBs ran into trouble as share prices fell sharply after the financial crisis of studdy It’ll just take a moment. There are now a number of fund-raising alternatives available to Indian companies, including the plain-vanilla foreign currency bond market which has become far more accepting of Indian credit.

The Murphy’s law of foreign currency convertible bonds

Since the Indian stock market is in bad shape, most of the bonds are up for redemption this year The 5 Minute Fvcb. Finance, Accounting and Control. Companies and investors would probably be best advised to stick to some csae these less complex instruments.

FCCBs as an investment instrument are old, but nearly 70 per cent of the FCCBs currently held by Indian companies were issued only about five years ago – during the euphoria of the bull run.

The share price fell below the conversion price, and the company failed to cwse the investors when it came up for redemption. Each bond would be converted into Previous Story Sweat it out.

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