Mahindra & Mahindra, the promoter of Mahindra Holidays & Resorts India, has announced its intention to sell an aggregate of 34 lakh shares of Rs 10 each of the latter through the separate window provided by the stock exchanges on March 7.
The parent company’s announcement to offer 4.02 per cent stake in Mahindra Holidays through offer-for-sale (OFS) route would bring down its holding in the group company to 78.67 per cent.
The floor price for Thursday’s OFS is fixed at Rs 270 a share, marginally less than Wednesday’s closing price of Rs 276.35. The decision is to meet the SEBI norm on public shareholding in listed companies of a minimum of 25 per cent which the companies should meet by June. However, the announcement by M&M has come as a surprise since it was only on January 21 the board of Mahindra Holidays had approved the issuance of equity shares through an institutional placement programme.
“It would offer, through one or more tranches, such (number of shares) that the total number of equity shares held by the 'public' immediately at the completion of such offerings does not exceed 25 per cent of the total number of outstanding equity shares as at the date of allotment of such equity shares,” the Mahindra Holidays’ board had said.
This was subsequently approved by the EGM on February 23.
Retail segment ups stake
The promoter’s stake in the company at the end of December 2012 was 82.69 per cent. Foreign institutional investors hold 3.57 per cent stake in the equity of Mahindra Holidays and DIIs 0.49 per cent.
Others, including retail investors, hold 13.25 per cent stake.
Even as FIIs and DIIs were pruning their holding in the company, retail investors were upping their stake in the past three quarters.
From 3.68 per cent stake at the end of September 2012, FII holding was down marginally to 3.57 per cent in December end. Similarly, DIIs stake slipped from 0.77 per cent to 0.49 per cent. However, retail investors’ share had gone up from 12.86 per cent to 13.25 per cent.
With Mahindra Holidays indicating a desire to limit the public shareholding to 25 per cent, the IPP window may be limited to the balance stake of 3.67 per cent only.