EIH offered 5.37 crore shares for subscription to existing shareholders at a price of Rs 65. The rights issue opened on September 29 and closed on October 13.

The firm received applications for 8.63 crore shares or 160 per cent of the issue size at the close, according to market sources.

In all, Rs 561 crore worth shares were bid for, they said.

EIH plans to use Rs 280 crore out of the net proceeds of the rights issue to repay/prepay some of its existing borrowings, according to the offer letter for the rights issue.

The remaining Rs 65.98 crore are to be used for general corporate purposes.

EIH had reported a profit of Rs 165.14 crore on a revenue of Rs 1,674.69 crore in fiscal 2020.

In the rights issue, 5.37 crore equity shares of face value Rs 2 each of the company were offered at a price of Rs 65 apiece (including a premium of Rs 63) to eligible existing shareholders in the ratio of 8 rights equity shares for every 85 equity shares held.

Promoters, who hold a 35.25 per cent stake in EIH, had agreed to subscriber to their full rights entitlement.

According to the offer document, EIH had Rs 539.96 crore debt as of August 31, 2020.

"The repayment/ prepayment of loans by utilising the net proceeds will help reduce our outstanding indebtedness, debt-servicing costs and improve our debt to equity ratio.

"In addition, we believe that the improved debt to equity ratio will enable us to raise further resources in the future to fund potential business development opportunities and plans to grow and expand our business," it said.

The board of EIH had in September approved fundraising of Rs 350 crore through a rights issue to shore up liquidity and strengthen the balance sheet in the wake of an uncertain business environment.

The rights issue would lead to equity dilution of 8.6 per cent on a post diluted equity base of 62.5 crore, it would have a positive impact on Earnings per share given the current lower return on equity of 4.2 per cent for Fy22e (due to restricted business) versus the average cost of debt of around 9.2 per cent, ICICI Securities had last month said in a commentary on the rights issue.

"The current pandemic environment has thrown up severe challenges for the entire hotel industry. However, EIH, with its strong balance sheet and strategic property locations is poised to benefit from a favourable demand-supply matrix in the long run due to likely postponement or reduction in new room supplies in the industry," it had said.

Shares of EIH Ltd were the last trading in BSE at Rs 76.85 as compared to the previous close of Rs 76.30.