Shares of IVRCL Ltd gained by over two per cent in a weak market today,after Subhash Chandra-led Essel group increased its holding in the infrastructure company to 12.27 per cent.
Essel group companies,Asia Satellite Broadcast Pvt Ltd and Jay Properties,have purchased 55,60,000 fresh shares,representing 2.08 per cent of the total equity,through an open market transaction.
With the latest share purchase,Essel group’s holding in IVRCL has exceeded that of the company’s promoter holding as on December 31,2011.
Reacting to the development,IVRCL shares rallied by more than four per cent to touch an intra-day high of Rs 72.20. After paring some gains,the stock ended the day at Rs 71.20,higher by 2.67 per cent on the BSE in a weak broader market. Similar movement was witnessed on the National Stock Exchange as well,where the stock jumped 4.03 per cent to Rs 72.20,before settling for the day at Rs 70.90,higher by 2.16 per cent.
IVRCL shares have gone up by more than 18 per cent since March 28 after the Essel group announced that it has acquired over 10 per cent stake in the company.
Sailesh Kanani,Research Head,Violet Arch Securities said that the hike in stake by Essel group could not be seen as a financial investment.
“Now that they (Essel) have more stake than IVRCL promoters,the logical conclusion is management control. Essel eventually may increase its stake to 25 per cent and go for open offer,” Kanani said.
Promoters of IVRCL held 11.18 per cent stake in the company,while FIIs and DIIs had 37.11 and 5.4 per cent respectively,as per the shareholding pattern recorded on December 31,2011. However,a takeover code is triggered only after an entity acquires a minimum of 25 per cent holding in a listed company.