Textile manufacturer Alok Industries is raising Rs 3,300 crore by issuing non-convertible redeemable preference shares (NCRPS) to promoter Reliance Industries Ltd (RIL) .

In 2020, Reliance and JM Financial Asset Reconstruction Co Ltd had successfully bid for Alok Industries, auctioned under bankruptcy rules to recover its dues to creditors.

RIL held 40 per cent of the company at the end of September 30, while JM Financial ARC held 34.99 per cent.

Alok Industries said in a regulatory filing on Tuesday its board has approved the issue of up to 3,300 crore NCRPS in tranches at a dividend rate of 9 per cent
on a private placement basis to Reliance.

The preference shares will be redeemable at par any time at the option of the company within a period not exceeding 20 years from the date of allotment.

The announcement led to the shares of Alok Industries firming up in an otherwise weak market. The scrip ended at Rs 19.56 on the BSE, a gain of 6.02 per cent over its last close.

In 2019, the Ahmedabad bench of the National Company Law Tribunal (NCLT) approved the sole bid of Reliance and JM Financial for Alok, worth Rs 5,050 crore.

Alok Industries had allotted 250 crore 9 per cent optionally convertible preference shares (OCPS) of Re 1 each for cash at par for a total consideration of Rs 250 crore to RIL. SBI, the lead bank, had initiated insolvency proceedings against the company in June 2017.

Alok Industries, incorporated on March 12, 1986, is an integrated textile manufacturer with headquarters in Mumbai with interests in the polyester and cotton segments.

The company had posted standalone revenues of Rs 1,326 crore in Q2 against Rs 1,668 crore a year ago.