Aditya Birla (AB) Capital shares surged nearly 3.5% in the early trading hours on Wednesday after it announced a Rs 750 crore investment in one of its wholly-owned subsidiaries, Aditya Birla Finance Ltd.

At 12 noon, shares of AB Capital were trading at Rs 178.05, up 2.01% from the previous close on the National Stock Exchange (NSE). The stock touched an intraday high of Rs 180.60, up 3.46% from the last close. 

In an exchange filing on Tuesday, the financial services arm of the Aditya Birla Group informed that it had infused a Rs 750 crore investment to subscribe to the equity shares of Aditya Birla Finance on a rights basis. 

It added that the investment is to help the financial services subsidiary meet its growth and funding requirements and improve its leverage ratio. AB Capital’s shareholding in AB Finance will continue to remain at 100%.

AB Finance also announced on Monday that it will raise up to Rs 2,000 crore through its first public issue of non-convertible debentures (NCDs) for an amount up to Rs 1,000 crore with an option to retain oversubscription up to Rs 1,000 crore.

The maiden issue opened today and will close on October 12, with an option of early closure. The allotment of NCDs shall be made in consultation with the designated stock exchange and on a first-come, first-serve basis, the company said in a statement.

At least 75% of the net proceeds of the issue will be utilised towards onward lending, financing and repayment of interest and principal of existing borrowings of the company and up to 25% towards general corporate purposes.