The Subhash Chandra-promoted Essel Group today said that it has no intent to hike stake in IVRCL Ltd from the 12.27 per cent it holds.
IVRCL plunged 4.95 per cent in today's trade with the scrip quoting at Rs 69.10.
Putting to rest days of speculation about the possibility of Essel Group making a hostile bid for IVRCL, Essel today said in a statement that the company decided to stay invested with its current holding until general shareholder consensus.
Mr Himanshu Mody, Head, Group Finance & Strategy, said Essel would stay invested with its current holding of 12.27 per cent until “general shareholder consensus or other considerations persuade Essel to intervene in IVRCL management to increase shareholders’ value.”
However, as a significant shareholder, Essel would keenly watch IVRCL’s management and performance. More specifically, it would critically evaluate the announcement made by the management in the media about its intent of selling some prime assets of the company.
This might cause further deterioration in the overall asset base of the company, in which case Essel would weigh all available options including initiating relevant proceedings and other ways of protecting its interest, he said.
Mr Mody said the announcement was to make Essel’s position transparent and to put at rest any false and misleading rumours that Essel might make an open offer or otherwise buy additional stake in the IVRCL.
Few months back, the Essel Group was approached by investment bankers stating that IVRCL promoters, who hold 11.2 per cent, may be interested in selling their stake. However, the indicated asking price was much above the then prevailing market price.
Essel has been in dialogue through an investment bank appointed by IVRCL promoters. It is disappointed to learn from the investment bank that IVRCL's promoters are neither interested in selling their stake nor willing to partner with Essel.
Essel Infraprojects Ltd (EIL), a group company, recently acquired majority stake in a Maharashtra-based infrastructure company with a substantial order book. Through this acquisition, EIL had become a joint venture partner of IVRCL in some infrastructure projects.