Deccan Gold seeks Sebi nod to raise Rs 44 cr from rights issue

MUMBAI: Mineral exploration firm Deccan Gold Mines Ltd has sought market regulator Sebi's approval to raise more than Rs 44 crore through a rights issue.

As per the draft letter of offer of Deccan Gold filed with Sebi, the company would issue nearly 3 crore shares of face value of Re 1 "for an aggregate amount of Rs 444.14 million to the eligible shareholders on rights basis".

"The issue price is 15 times the face value of the equity shares," the company said in the document.

Deccan Gold has proposed to issue the shares in ratio of one equity share for every 2 equity shares held by the investors of the company.

In a rights issue shares are offered to existing investors as per their holding at a pre-determined price and ratio.

The funds raised from the issue would be used for investment in Deccan Exploration Services Ltd -- an arm of Deccan Gold -- as well as other general corporate purposes, the company said in the draft papers.

Out of the Rs 44.4 crore planned to be raised, the firm has proposed to make an equity investment of Rs 34.4 crore in Deccan Exploration and Rs 9.4 crore for its general corporate needs, it added.

SPA Capital Advisors is the lead manager to the issue while Link Intime India would be the registrar to the issue.

The BSE-listed company has received in-principle approval from the stock exchange for listing of the issue.

Deccan Gold is into mineral exploration focused on making discoveries of gold deposits that are suitable for commercial operations.