Shares of IFCI plunged to a low of Rs 26.10 today before recovering part of their losses, after investors who built positions on expectations of an open offer by the Government of India in the wake of its stake hike, began unwinding their holdings after SEBI exempted GoI from making an open offer.
After the GoI decided to convert debentures worth Rs 923 crore into equity at par, its stake in the company is expected to go up to 55.57 per cent. This fuelled expectations that the Government will come out with an open offer to acquire 26 per cent more from other shareholders.
However, after the Government made an application to SEBI seeking exemption from this rule, the wholetime member of SEBI, Rajeev Kumar Agarwal ruled granting exemption from making an open offer by GoI.
The stock has gained about 40 per cent in the past one month — climbing from a low of Rs 24 to a high of Rs 33.65 on the BSE on expectations of an open offer. But following the SEBI ruling, investors who had built up positions in IFCI, have begun to unwind their holdings.
The stock, which opened at Rs 32.50 on the NSE, plunged to a low of Rs 26.10, but pulled back to trade at Rs 30.45, a loss of Rs 1.65 or 5.14 per cent. The traded volume was huge at 1.97 crore shares on the NSE in about three hours of trading.