Dilip Buildcon Eyes ₹20 Billion Capital Raise Via CPs And NCDs To Fund Growth

Image Source : The Economic Times

Dilip Buildcon Ltd has announced plans to raise up to ₹20 billion through a dual issuance of Commercial Papers (CPs) and Non-Convertible Debentures (NCDs) on a private placement basis. The move is aimed at strengthening liquidity and supporting ongoing infrastructure projects across roads, mining, and irrigation.

Key Highlights From The Fundraising Proposal

- The company will issue CPs worth up to ₹10 billion with tenors ranging from 7 to 365 days, offering short-term financing flexibility.
- NCDs worth ₹10 billion will be senior, secured, rated, and redeemable, with a coupon rate of 8.90 percent payable semi-annually.
- Both instruments will be issued in dematerialized form and are expected to attract institutional investors seeking stable returns.

Strategic Context And Financial Position

- The capital raise aligns with Dilip Buildcon’s deleveraging strategy, following a ₹800 crore debt reduction in FY24 and improved interest coverage ratios.
- Funds will be used to meet equity commitments for 16 Hybrid Annuity Model (HAM) projects and one coal mining venture, requiring ₹13 billion over FY25–FY26.
- The company’s liquidity profile remains adequate, supported by warrant proceeds, asset monetization, and strong cash accruals.

Market Outlook And Investor Sentiment

- CRISIL and India Ratings have revised Dilip Buildcon’s outlook to positive, citing improved financial metrics and operational resilience.
- The issuance is expected to enhance working capital efficiency and reduce reliance on high-cost borrowings.

Sources: Economic Times, MarketScreener, CRISIL Ratings, India Ratings, Rediff MoneyWiz, Business Standard.