Equitymaster is not an Investment Adviser. All content and information is provided on an ‘As Is’ basis by Equitymaster. Since the Indian stock market is in bad shape, most of the bonds are up for redemption this year There have now been a number of cases where FCCB holders have dragged firms to court because of payment default. Wockhardt planned to use the money raised to fund the expansion activities of the company. While the Leela Group’s newest property has been especially designed to attract a foreign clientele, its Chief Financial Officer is busy staving off foreign investors. More Views on News.

The Vijay Bhambwani Show. A conversion price is fixed at the time of the agreement. Your session has expired, please login again. All content and information is provided on an ‘As Is’ basis by Equitymaster. Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

In the meantime, you may want to share this article with your friends! The stock hit a week high of Rs in Junebut that too is not even half of the conversion price the company caae borrowed at. The company reported an 86 per cent drop in its profits for the January-March quarter on the back of lower customer billings.

case study on fccb

The debt-to-equity ratio will get more stretched. The share price fell below the conversion price, and the company failed to pay the investors when it came up for redemption.


When FCCB turns ugly: Part I

The 5 Minute Wrapup. Inbondholders filed a winding-up petition against Zenith Infotech Ltd after the company failed to repay about crore.

case study on fccb

During market crashes and bear periods, the conversion price of the FCCBs becomes many times higher than the current share price. About Sttudy The Equitymaster Way. The performance data quoted represents past performance and does not guarantee future results. Nair, the founder of Leela, hold Companies and investors would probably be best advised to stick to some of these less complex instruments. Case Study Volumes Collection. Please find below the full details of the product you clicked a link to view.

Thank you for posting your view on Equitymaster! In24, crore was raised, after which issuances dwindled.

The Murphy’s law of foreign currency convertible bonds

Wockhardt planned to use the money raised om fund the expansion activities of the company. Samsung has just launched a new sensor for ultra-high resolution mobile photography How to flash Android Q Beta Indians are searching ‘dating’ more than ‘matrimony’: View our pricing guide or login to see prices. Pay through PayPal Amount to be paid: The pharma company was finding it difficult to raise debt at competitive rates in India.

No doubt the tardy Indian legal system will work as deterrent for investors who would want to consider filing a winding-up petition. This article explains FCCBs and these developments.

When FCCB turns ugly: Part I – Views on News from Equitymaster

When the bonds mature, if the shares are trading above that price, bondholders can convert their bonds into equity. Because the redemptions stidy large and had the potential to a pose a systemic risk, regulators were forced to intervene. In addition, the domestic bond markets are also showing early signs of stuyd. Sowjanya Mora Fareeda ; D Satish. The Case Centre is a not-for-profit company limited by guarantee, registered in England No and entered in the Register of Charities No The bonds were converted after shares went above a pre-fixed price While companies such as Uflex are cautiously treading the FCCB redemption path, those like Suzlon are confident of sailing through.


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case study on fccb

Register Product search Getting started Search for products Try something new. Equitymaster is not an Investment Adviser. And stock prices of many of the issuers are far below their conversion prices.

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