Meanwhile, the BSE Sensex was 143.39 points, or 0.87%, to 16597.84.

On BSE, 9.64 lakh shares were traded in the counter as against an average daily volume of 11.86 lakh shares in the past one quarter.

The stock hit a high of Rs 44.20 and a low of Rs 43.30 so far during the day. The stock had hit a 52-week high of Rs 45.30 on 8 September 2009 and a 52-week low of Rs 13.03 on 8 December 2008.

The stock had outperformed the market over the past one month till 15 September 2009, rising 7.52% as compared to the Sensex 6.77% rise. It outperformed the market in past one quarter, jumping 37.50% as against 10.61% rise in the Sensex.

The mid-cap steel casting maker has an equity capital of Rs 28.73 crore. Face value per share is Rs 1.

The current price of Rs 43.85 discounts the company's Q1 June 2009 annualised EPS of Rs 7.43, by a PE multiple of 5.90.

The qualified institutional placement (QIP) issue will a be mix of issue of equity shares and non convertible debentures (NCDs) with warrants.

Besides a plain equity offering of Rs 100-150 crore, the company intends to issue NCDs with convertible warrants. The NCD issue size is likely to be Rs 200 crore with a tenure of three years. The warrants, convertible into equity shares in 3-5 years, amount to Rs 200 crore.

The issue of securities is meant to augment the long- term resources, including working capital requirement, and to develop iron-ore mines, coking and non-coking coal mines. Part of the proceeds will also be used to build a war chest for future opportunities, reports suggest.

However, Electrosteel Castings will not be able to raise the entire money now as warrant holders pay only a fraction of the contracted sum.

Electrosteel Castings (ECl) has appointed Edelweiss Capital as the merchant banker. It will now seek shareholders' approval through a postal ballot.

Meanwhile, the ECL board has cancelled the warrants issued in March last year. The company had allotted 87 lakh warrants convertible at Rs 68 per share to a foreign entity on 11 March 2008. The company had also received Rs 5.91 crore representing 10% of the total consideration towards the allotment of the warrants.

The warrants were convertible within 18 months from the date of allotment, and the last date of conversion was 11 September 2009. However, the applicant did not opt for the conversion as the ruling market price was at a steep discount to the conversion price. As a consequence, the entire amount received has been forfeited and the warrants cancelled.

Electrosteel Castings' net profit soared 276.8% to Rs 58.10 crore on a 7.6% decline in sales to Rs 372.90 crore in Q1 June 2009 over Q1 June 2008.

Electrosteel Castings manufactures steel castings, grinding media and spun-cast iron pipes. The company also manufactures steel ingots, cast-iron castings and ductile iron pipes. Electrosteel Castings also manufactures pig iron. The group exports its products to a number of countries, including those in Europe, South-East Asia and Africa.