Mumbai: Billionaire Tulsi Tanti’s family cut its stake in Suzlon Energy Ltd, while Cipla Ltd and Jaiprakash Associates Ltd sold a combined Rs2,548.8 crore worth of stock, taking advantage on the best rally in Indian stocks since 1991.
Tanti’s family raised Rs678 crore selling a stake while Jaiprakash, a builder of dams and roads, raised Rs1,190 crore and Cipla sold Rs672 crore of stock, according to people familiar with the transactions.
The companies are tapping a revival in investors’ appetite for stocks as India’s benchmark Sensex heads for its best annual performance in 18 years after climbing 73% this year. The share sales may help the companies expand operations in Asia’s third largest economy as it recovers from the worst global recession since the Great Depression.
“Since we didn’t see any fund raising last year, we are seeing the pent-up demand and supply coming in now,” said Prateek Agrawal, head of equities at Bharti Axa Investment Managers Pvt. Ltd in Mumbai. “Globally markets have gained and the system is flush with liquidity.”
The Asian Development Bank on Tuesday raised India’s economic growth forecast to 6% from 5%. Companies including Volkswagen AG, Toyota Motor Corp. and other car manufacturers have announced plans to spend at least $6 billion through 2012 to build factories in India, and Ford Motor Co. said on Wednesday it will sell its first small car in the country.
Jaiprakash sold 50 million shares for Rs238.46 apiece, according to a person familiar with the matter. Bank of America Merrill Lynch arranged the deal, according to a sale document on Tuesday. The shares dropped 6.2% on Wednesday.
The controlling shareholders of Suzlon, India’s biggest maker of wind turbine generators, sold 70 million shares at Rs96.85, a person said, declining to be identified. That was a 45% discount to Tuesday’s closing price. Citigroup Inc. advised on the sale.
The funds will be invested or loaned to the firm to help expand, Suzlon said in an emailed statement. The controlling stakeholders’ stake dropped to 53.1% following the sale. Shares of Suzlon, which have risen 52% this year, dropped 6.25% to Rs94.60 in Mumbai on Wednesday.
Cipla, India’s second biggest drug maker by market value, sold the shares to institutional investors, four people familiar with the matter said. The sale was managed by CLSA Asia-Pacific Markets, JPMorgan Chase and Co. and Kotak Mahindra Capital Co. Ltd, according to a document filed with the National Stock Exchange on Tuesday.