Promoters have fixed the price range between Rs 150 and Rs 160 per share for the offer. With this transaction, promoters stake in the company will likely to increase from 50.14% to 55.04%.
As per the Sebi takeover code promoters holding more than 25% but less than 75% can buy up to 5% through creeping acquisition in one financial year. Any acquisition of further shares beyond 5% should require the acquirer to make an open offer.
Any increase in promoters stake will make it easier for them to delist after one year of cooling off period. Promoters of listed Indian companies will have to acquire at least half the public shareholding in their firms or 90% of the total equity capital whichever is higher to become eligible for delisting.
During the delisting offer in October, promoters were able to get only 125.47 crore confirmed bids against the required 134.1 crore shares. About 12.32 crore shares tendered were not confirmed and as a result, the delisting process failed. Once failed, promoters cannot launch a delisting offer within one year of the completion of the open offer period. During the buyback offer, many of the domestic mutual funds were tendered their shares at Rs 150-160 per share.
As on September 30, LIC held 5.58% while ICICI Prudential Mutual Fund and HDFC Mutual Fund owned 4.36% and 2.79% stake respectively. Soceite Generale also holds 2.33% stake in the company.
