India Inc savoured creeping buy limit

India Inc’s top corporates took maximum advantage of the enhanced 10% creeping acquisition limit by the Securities and Exchange Board o...

India Inc’s top corporates took maximum advantage of the enhanced 10% creeping acquisition limit by the Securities and Exchange Board of India (Sebi). The limit of acquisition for the promoters of Indian companies was relaxed by Sebi in September 2001 from the then 5% to 10% for a period of six months, which was further extended by six months till September 2002. Sebi though has once again decided to tighten this limit to 5% from October 2002.

According to the figures filed by listed corporates with BSE for creeping acquisition under the listing agreement, scores of companies from various sectors have taken advantage of this relaxed limit.

In the case of Bank of Rajasthan, group companies Cyber Info Zeeboomba.com Ltd, 21st Century Entertainment and Cyber Infosystems & Technologies acquired 5.23% stake last month taking the total holding to 42.70% at the end of September 2002 from the earlier level of 37.47%.

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The maximum benefit of this provision was taken by the promoters of Amtrex Hitachi Appliances Ltd and Bajaj Hindustan Ltd, where the acquirer purchased close to 10% (maximum permissible limit under the relaxed norm for creeping acquisition).

In Amtrex Hitachi, Asman Investments Ltd acquired 9.95 % stake on September 27, 2002, which took its stake in the company to 54.58%. In the case of Bajaj Hindustan, Bachhraj & Co and Jamnalal Sons Pvt Ltd acquired 5.15% and 4.82%, respectively, (collectively 9.99%) taking their total stake in Bajaj Hindustan to 45.67% from the earlier level of 35.68%. The BM Thapar Group company, Solaris Chemtech and English Indian Clays Ltd have also increased their stake in another group company, Crompton Greaves Ltd (CGL). Solaris Chemtech acquired 12.18 lakh shares ammounting to 2.33% of the equity of CGL in September 2002. With this acquisition, its stake in CGL rose to 3.15%. Another Thapar group company, EICL, also acquired 2.77% stake through creeping acquisition route in September 2002 and hiked its stake in CGL to 4.77%. Thus, the stake of these two group companies in CGL as on September 30, 2002, stood at 7.92% from the earlier level of 2.82%.

Citibank Overseas Investment Corporation Ltd also hiked its stake in one of the Citi Group companies e-Serve International Ltd. Citibank’s stake in e-Serve at the end of September 30, 2002, stood at 44.38% from the earlier level of 40.19%. SRF Ltd also witnessed the creeping acquisition exercise for the quarter ended September 30, 2002 for the first time from the group concern SRF Polymers Ltd (SPL). It acquired the shares of SRF in two tranches (3.61% and 5.40%) and in all acquired 9.02% stake in the company during September 2002.