Comments
The battle for control of infrastructure company IVRCL is set to hot up with the Subhash Chandra-owned Essel Group overtaking the stake of the promoters.
According to filings with the stock exchanges, while the promoters of IVRCL Group — led by its Chairman and Managing Director — Mr E. Sudhir Reddy, own about 11.18 per cent, the Essel Group of Mr. Chandra, now owns 12.27 per cent. The disclosure of the acquisition of about 55.60 lakh shares was made on Wednesday by Asian Satellite Broadcast (a group company).
According to market buzz, the Essel Group's accumulated stake could be close to 20 per cent. All indications point towards a hostile takeover bid.
However, as per the new takeover code, the open offer trigger comes into play only after the stake touches 25 per cent ( it was 15 per cent earlier). Further, the open offer has to be for 26 per cent of the company's remaining shares, up from 20 per cent earlier.
Mr Sudhir Reddy told Business Line , “As of now, we are seeing this development as an investment in the company. Each time they add two per cent stake, they have to inform the exchanges once their holding is more than 10 per cent.”
“It is for them (Essel) to react to the development rather than IVRCL,” he said.
“As far as we are concerned, they are one more investor who see value in IVRCL. Let us watch what they want to do. It will be clear in the next few days. We command a robust order book of Rs 26,000 crore and are confident of managing the company. It is for institutional holders to evaluate as to who has better credentials,” he said.
The promoter holding has come down to 11.2 per cent due to dilution of stake to raise funds. Currently, institutional investors have 43 per cent stake and corporate bodies, 21 per cent. The rest is with the public. The company shares flared up on stake sale buzz to close the day at Rs 71.20 on Wednesday, up 2.67 per cent.
Mr Nitin Arora of Angel Broking said, “All indications point towards a hostile bid by Essel. Essel Infrastructure, a group company, has an order book of Rs 27,000 crore and a low debt of Rs 590 crore. In the next few weeks, it will be clear whether this pans out. Or, both (companies) may decide to work together as partners.”
Comments
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.