* To raise 416 bln yen via bond and stock sale

* To dilute shares more than 30 pct

* Funds to be used to cut debt, turn businesses around

* Stock falls 8.5 pct in steady market

* Shares have more than halved since hitting peak in May (Adds U.S. stock movement)

By Mayumi Negishi

TOKYO, Nov 16 (Reuters) - Mired with losses, Japan's biggest electronics group by sales, Hitachi Ltd (6501.T: Quote, Profile, Research), is raising up to $4.6 billion to cut debt as it seeks to turn around its sprawling businesses and invest in new growth drivers.

The capital raising, the company's first in 27 years, follows similar moves by NEC Corp (6701.T: Quote, Profile, Research) and Toshiba Corp (6502.T: Quote, Profile, Research), and sent Hitachi's shares down 8.5 percent in the biggest drop in six months on Monday even though markets expected the fund raising.

Hitachi's shares (HIT.N: Quote, Profile, Research) trading in the United States fell 7 percent in morning activity, to $30.30 on the New York Stock Exchange.