Shares of Industrial Finance Corporation (IFCI) on Wednesday plummeted about 19 per cent after market regulator Sebi approved a proposed hike of the government stake in the firm to 55.57 per cent, without triggering an open offer.
The company’s scrip tumbled 18.69 per cent to Rs 26.10 on the NSE before closing at Rs 30.05 a share, down 6.39 per cent.
At the BSE, the scrip plunged 13.86 per cent to Rs 27.65 to settle at Rs 30.25 per share, down 5.76 per cent.
The Cabinet last month approved a proposal for conversion of debentures worth Rs 923 crore into shares of IFCI, following which the government’s stake in the financial institution would rise to 55.57 per cent, from a meagre 0.0000011 per cent currently.
As per Sebi’s takeover norms, any stake purchase of 25 per cent or more requires the acquirer to make an open offer for a further 26 per cent stake from the public shareholders.
In an order, dated September 24 and released yesterday, Sebi granted the exemption to the acquirer, the Government of India, as the current proposal was in consonance with the previously declared government policy with regard to IFCI Ltd.