Essel raises stake in IVRCL, holdings exceed promoter’s
Essel raises stake in IVRCL, holdings exceed promoter’s
Hyderabad: Subash Chandra-led Essel group said it has raised its stake in IVRCL Ltd to 12.27% from 10.19%, becoming the single biggest shareholder in the Hyderabad-based infrastructure developer.
Essel group firms—Asia Satellite Broadcast Pvt. Ltd and Jay Properties Pvt. Ltd—bought 55,60,000 shares, representing 2.08% of IVRCL’s total equity, through an open market transaction, Essel group said in an exchange filing on Wednesday.
IVRCL promoters led by E. Sudhir Reddy held 11.18% in the company as on 31 December. Foreign institutional investors and local institutional investors hold 37.11% and 5.4%, respectively.
Essel group on 27 March said it has acquired a 10.19% stake in IVRCL and is keen to increase it, fuelling speculation of a hostile takeover by the group, which has business interests across media, entertainment, packaging, infrastructure, education, precious metals and technology sectors.
Shares of IVRCL gained by 2.67% to end trading at ₹ 71.20 on BSE, while the benchmark Sensex declined by 0.63%.
Sudhir Reddy, chairman of IVRCL, and Balarami Reddy, chief financial officer, did not respond to calls and messages.
Sudhir Reddy, the founder-promoter of the company, has hinted that he will resist any attempts of an hostile takeover.
Himanshu Mody, head, group finance and strategy, and spokesman for Essel Group, couldn’t be reached.
“It’s clear that Essel wants management control of IVRCL," said Sailesh Kanani, research head at Mumbai-based brokerage Violet Arch Securities Pvt. Ltd. “We have doubts whether IVRCL promoters will be able to fend off Essel takeover attempt."
According to the existing takeover code, the trigger point for an open offer stands at 25%.
For the quarter ended 31 December, IVRCL reported a profit of ₹ 6.8 crore and a revenue of ₹ 1,195.5 crore.
The company has an order book of ₹ 25,000 crore, of which it has been able to secure projects worth ₹ 10,677 crore. IVRCL’s gross debt stands at ₹ 2,500 crore.
The company plans to raise ₹ 400 crore through sale of land and stakes in some projects in order to invest in projects under execution.
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