UPDATE 1-India Suzlon shares fall on $390 mln rights issue plan

MUMBAI, Sept 25 (Reuters) - Shares in India's Suzlon Energy Ltd (SUZL.BO: Quote, Profile, Research) fell more than 7 percent on Thursday after it said it would consider a rights issue to raise up to 18 billion rupees ($390 million) on Sept. 27.

The world's fourth-biggest wind turbine maker did not say what it would use the funds for.

Suzlon had said earlier this month it had struck a deal with Martifer (MARTI.LS: Quote, Profile, Research) for an early acquisition of the Portuguese conglomerate's stake in REpower Systems (RPWGn.DE: Quote, Profile, Research) for nearly $400 million.

Suzlon is just the latest Indian company to tap rights issues to raise funds as higher borrowing costs pinch.

Hindalco Industries Ltd (HALC.BO: Quote, Profile, Research), India's leading aluminium maker, on Monday launched a 50.5-billion-rupee rights issue, while Tata Motors (TAMO.BO: Quote, Profile, Research), India's top vehicle maker, is set to open its 41.5-billion-rupee rights issue on Sept. 29.

But turbulent market conditions are a concern, a trader said.

"People have concerns about any company that is looking to raise money in these market conditions," said an institutional sales dealer who asked not to be named.

"Even the Tata Motors offer doesn't look very exciting."

Thu Sep 25, 2008 3:52pm IST

Tata Motors, which is raising the money to help fund its $2.3 billion acquisition of Jaguar and Land Rover, had scaled down the size of its rights offer from 72 billion rupees.

Indian companies have raised about $4.8 billion from rights issues until mid-August, Thomson Reuters data showed, topping the Asia-Pacific region excluding Japan.

More such offers may be in the pipeline after the capital markets regulator recently eased rules for rights issues, cutting the timeline and changing the pricing conditions.

Shares in Suzlon were down 7.3 percent at 181.75 rupees at 1019 GMT, after falling as low as in a Mumbai market that was down 0.9 percent. ($1=46.1 rupees)

(Reporting by Rina Chandran; Editing by Ranjit Gangadharan)

Source :

http://in.reuters.com/

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Regards
Subu

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