The Hindu Business Line : Accept these open offers

Parry Agro: Shareholders Parry Agro Industries can sell their holdings in the open offer made by New Ambadi Investments Ltd at the offer price of Rs 70 per share.

The latter, along with other members of the promoter group, already control 76.9 per cent of the stake in Parry Agro and this offer is being made to mop up the residual public shareholding in the company.

Shareholders need to view the offer as an attractive exit option from the stock.

For one, the stock offers limited liquidity, as transaction volumes in the stock are rather thin. Therefore, even though the open offer price of Rs 70 does not carry a significant premium to the market price of the stock — which has been trading at Rs 45-70 over the past one year — it is probably the best price shareholders can get for their holdings.

Also , the promoter group is likely to pursue this offer until eventual delisting of the stock from the bourses.

Gujarat JHM Hotels: Investors can accept the open offer by JHM Hotels Inc. to the shareholders of Gujarat JHM Hotels. The offer is to acquire 32.35 per cent of the company's outstanding equity at Rs 10 per share. JHM Hotels holds 62.78 per cent of Gujarat JHM Hotels.

Given the fundamentals of Gujarat JHM and its illiquidity on the bourses, the shareholders can accept the offer.

The stock currently trades at Rs 9. Shaky financials, post-offer illiquidity and an almost certain delisting leaves the shareholders with no choice but to opt for the offer and exit from their holdings in the company, when the price of the disposal is at least certain. The offer opens on March 18 and closes on April 17.

Shantivijay Jewels: The offer to acquire 10 per cent of the shareholding in Shantivijay Jewels at Rs 23 per share in cash may be considered by shareholders .

The acquirers and promoters together hold 90 per cent of the equity capital. Hence, the promoters can decide to delist the company anytime. The promoters also have a choice to increase their shareholding to above 90 per cent through the creeping acquisition route, in which case the shareholder will not benefit. Moreover, the shares are not frequently traded on the bourses.

The Jewellery business is a high-risk business and generally does not attract investor attention.

Hence, this is a good opportunity to sell the shares and invest it in other profitable avenues.

The offer is made with an intention to completely own the business and delist the company from the bourses.

Therefore, it is a good opportunity to cash in on the opportunity. The offer opened on February 18 and closes on March 19.

Balwas e-Com: IT People Private Ltd has entered into a share purchase agreement with the promoter group of Balwas e-Com India to acquire a 48.26 per cent equity stake in the company at Rs 2.50 per share.

As an acquirer, IT People is coming out with an open offer to acquire an additional 27.21 per cent equity at an offer price of Rs 2.50 per share. Prior to the share-purchase agreement, the acquirer had already bought 14.52 per cent equity at Rs 2.20 over the previous 12 months.

Balwas e-Com, the target company is currently engaged in the business of software development. The fair value of Balwas e-Com arrived at by an independent valuer was Rs 3.17.

Though the offer price is lower than the fair value, it may be prudent for the shareholders to exit the stock at this price.

Primarily because, the software services sector is maturing into a play in which frontline companies will get bigger and stronger at the expense of small-sized players.

The offer opened on February 18 and closes on March 19. The manager to the offer is Khandwala Securities.

BL Research Bureau

Article E-Mail :: Comment :: Syndication

Stories in this Section
Accept these open offers

Max New York Life's Pension Plan

Dividend yields and value managers

A show of Caliber

The fall and fall of FII inflows

Liquidity counts, influence wanes

Hero and Honda — Fill it, shut it, forget it?

Pension reforms: Timely answer

Grasim/L&T: Needed, bold approach by institutions