Mahindra & Mahindra Ltd, promoter of Mahindra Holidays & Resorts India Ltd, has submitted to the BSE a Notice of Offer for the sale of 34,00,000 equity shares of Rs 10 representing 4.02 per cent of the equity share capital of the company as on March 5, 2013.
The sale will be exclusively through a separate window provided by the stock exchanges for this purpose.
The sale will commence on March 7 at 9.15 a.m. and close on the same day at 3.30 p.m. (Indian Standard time), the company said.
The decision apparently 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 this year.
However, the announcement of sale by M&M through the OFS (Offer for Sale) route made by the stock exchanges late last night has come as a surprise since it was only on January 21, 2013, that the board of Mahindra Holidays had approved the issuance of equity shares through an Institutional Placement Programme (IPP). 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.The promoter's stake in the company as at the end of Dec 2012 was 82.69 per cent.
Apart from the promoters, the FIIs hold 3.57 per cent stake in the equity of Mahindra Holidays and DIIs' stake is 0.49 per cent. Others, including retail investors, hold 13.25 per cent stake in the equity of Mahindra Holidays.
Interestingly, while the FIIs and DIIs were pruning their holding in the company, retail investors were upping their holding in it in the past three quarters. While FIIs held 3.68 per cent stake in the company at the end of the June and September 2012 quarters, it was down marginally to 3.57 per cent in December. Similarly, DIIs also cut back their stake from 0.77 per cent of the equity in the first two quarters of 2012-13 to 0.49 per cent in the quarter ending Dec 2012. However, the share of retail investors had gone up from 12.86 per cent in the quarter ending June and September 2012 to 13.25 per cent on December 31, 2012.
The parent company’s announcement to offer 4.02 per cent stake in Mahindra Holidays through the OFS route would bring down its holding in the group company to 78.67 per cent. With the company’s promoters retaining 75 per cent stake in it, it is possible that the IPP window may be limited to the balance stake of 3.67 per cent (78.67 per cent- 75 per cent= 3.67 per cent).
Mahindra Holidays' shares were trading at Rs 278, a gain of Rs 1.05, at 1.50 pm