Bankers to rescue Hindalco rights issue

The Rs50.47bn rights issue of Hindalco Industries is set to devolve on the underwriters. Although the quantum of the devolvement will be clear on Friday after the closure of the issue, reports said the figure is expected to be in the range of at least 15-20%. The five merchant banks are ABN Amro, Citigroup, Deutsche Bank, DSP Merrill Lynch and State Bank of India. The offer managed to attract subscription of only 45% (including a large chunk subscribed by the promoters) till Wednesday. This included GDR holders' application to buy their entire entitlement of nearly 11%. The Aditya Birla group, the promoters, has promised to subscribe to 50% of the issue, against its entitlement of 31.4%. Domestic financial institutions have a combined 15% stake in the aluminium giant.