Jaiprakash CB prompts sharp drop in share price

The industrial conglomerate raises $150 million and becomes the first Indian company to issue a convertible bond in five months. But questions about the use of proceeds and the timing of the deal cloud the offering.
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A young Indian boy celebrates Independence Day earlier this month. Indian CBs have been few and far between so far this year (AFP) </div>
<div style="text-align: left;"> A young Indian boy celebrates Independence Day earlier this month. Indian CBs have been few and far between so far this year (AFP) </div>

Jaiprakash Associates, an Indian industrial conglomerate, has raised $150 million from a five-year convertible bond that it said it will use towards the redemption of a larger outstanding CB that matures on September 12.

The deal, which launched late on Tuesday evening and was completed yesterday morning, was reasonably well received, but the use of proceeds made some investors a bit nervous, particularly since the company had previously said that it had enough cash to repay the outstanding CB. To then do a deal just two weeks before it matures did spark some uncertainty about the company’s finances and the share price dropped as much as 10.3% intraday before...

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