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Thursday, July 19, 2018

Kingfisher promoter holding: record low

Promoter holding in Vijay Mallya-led UB Group's Kingfisher dipped to a low of 35.86%.

Written by Agencies | New Delhi | Published: July 2, 2012 8:08:56 pm

The promoter holding in Vijay Mallya-led UB Group’s Kingfisher Airlines has dipped to a low of 35.86 per cent – the lowest since the carrier became a public listed company after acquiring Deccan Airways.

After excluding the shares they have pledged,the promoters hold a meagre 3.55 per cent in the crisis-ridden airline.

As per the latest shareholding disclosure by the company,the promoters hold 35.86 per cent,down from about 43 per cent in April and over 50 per cent at the close of the last fiscal ended March 31,2012.

However,the latest decline in their stake is not because of sale of shares but because of increase in total number of the company’s shares,following the conversion into equity of warrants issued to an entity,LKP Finance Ltd,which now holds over 16 per cent stake.

While the promoters continue to hold the same number of shares (about 29 crore),the total number of the company’s shares has increased to about 81 crore,from about 67 crore prior to the latest shares allotment to LKP Finance and from 58 crore as on March 31,2012.

Meanwhile,the holding of individual shareholders have increased significantly since the beginning of the current fiscal. Small retail investors now hold 12.6 per cent,while HNIs hold 8.55 per cent stake — up from 9.56 per cent and 4.21 per cent respectively at the end of last fiscal.

The current promoter holding is lowest since Kingfisher became a public-listed company after acquisition of Captain Gopinath founded Deccan Airways in 2007-08.

The promoters have pledged more than 90 per cent of their own holding in the airline.

Burdened by a huge debt pile,Kingfisher has been flying through turbulent times for many months now and its market value has seen a significant erosion of more than two-third in the past one year.

Its shares hit an all-time low of Rs 10.05 early last month and is currently trading near Rs 12 level. About a year ago,the stock was trading over Rs 40 level.

The promoters currently hold shares worth about Rs 350 crore in Kingfisher,but the value of their non-pledged shares is worth just about Rs 30 crore.

The total market value of Kingfisher currently stands at about Rs 960 crore.

As per the latest shareholding pattern as on June 23,2012,the public shareholders have 64.14 per cent – which includes 0.99 per cent by FIIs,3.31 per cent by domestic institutional investors,49.84 per cent by non-institutional investors and 27 per cent by corporate bodies.

Major shareholders include LKP Finance (16.5 per cent),SBI (3.5 per cent),ICICI Bank (2.1 per cent),IDBI Bank (2.2 per cent) and Bank of India (1.1 per cent).

In April,the promoter holding had fallen below the psychological level of 50 per cent for the first time in four years. However,this does not trigger as such any takeover threat,which could arise only after some other entity gets a higher stake than the promoters,and that too of at least 25 per cent as per the takeover regulations.

Speculations have been doing the rounds for a long time that some strategic or financial investors could acquire stake in Kingfisher,while there have also been talks of some ‘white knight’ coming to the rescue of crisis-hit airline.

The term ‘white knight’ is used for a friendly investor,who buys a sizeable stake from promoter or public investors in a listed entity facing outside takeover threats.

While Kingfisher Airlines was originally an unlisted entity,it got listed in the stock market after it acquired Deccan Aviation,a listed firm,and merged the same into it.

Prior to its acquisition,Deccan Aviation had seen promoter holding of as low as 16 per cent,but it rose beyond 50 per cent soon after completion of the takeover process.

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