UPDATE 2-Hitachi shares head for biggest drop in 6 months

* Shares plunge 8.5 pct vs electrical index's 1.4 pct drop

* Hitachi says to make an announcement if any decision made

* Forced to seek funds before recovery realistic -analysts (Adds share price, market comment, background)

By Mayumi Negishi

TOKYO, Nov 16 (Reuters) - Shares of Hitachi Ltd (6501.T), Japan's biggest electronics firm by revenue, were headed for their biggest single-day slide in six months after sources said it would raise up to $4.5 billion to shore up its battered capital base.

Two sources familiar with the matter told Reuters over the weekend that Hitachi plans to sell about 300 billion yen worth of shares and another 100 billion yen in convertible bonds. [ID:nT155750]

News of the public share offering, which would be Hitachi's first in 27 years, sent its shares down 8.5 percent, underperforming a 1.4 percent fall in Tokyo's electrical machinery index .IELEC.T.

Hitachi said in a statement that it would make an announcement if any decision were reached.

Hitachi, a sprawling conglomerate with more than 900 group firms, is joining a scrum of Japanese companies tapping equity markets before a possible slowdown in the economy.

But Hitachi has been forced to seek money before it could form a realistic plan for recovery, some analysts said.

"This amount is the absolute limit that Hitachi can seek from markets, but this may not be enough even to cover restructuring costs at such a mammoth firm, let alone invest in growth," said Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management Co.

"I don't think investors will want to put their money in. There are so many more deserving companies that need funds."

Hitachi, like many of its once high-flying peers, has lost market share in flat TVs and digital devices to rivals from South Korea and Taiwan, while it has been slow to adapt to innovations such as digital downloads and cloud computing.

Faced with its fourth straight year of losses, Hitachi's shareholders' equity ratio has slipped to just below 11 percent, roughly half that of rival NEC Corp (6701.T), which earlier this month announced it would raise up to $1.5 billion. [ID:nT212429]

The ratio is calculated by dividing shareholders' equity by total assets and is a measure of financial strength.

Issuing 300 billion yen worth of stock at Friday's closing price of 294 yen would boost Hitachi's shares outstanding by about 30 percent.