is based on the recent announcement of Reliance Industries
for a second open offer to acquire an additional 20-per
cent equity in the company. The open offer is set to open
within a fortnight.
Say senior BSES
officials: We may not tap the capital market to
mobilise funds immediately. The Reliance open offer would
alter the current equity structure of the company and
it would put BSES in a more advantageous position to approach
the capital market.
BSES had plans to raise Rs
300-500 crore from the market for its expansion activities.
During the fiscal 2001 the company faced huge accumulated
losses of around Rs 900 crore on account of its power
distribution subsidiaries in Orissa.
If the 20-per cent
open offer is fully subscribed, Reliances stake
in BSES would increase from the existing 44 per cent to
64 per cent, converting BSES into a subsidiary of Reliance
According to analysts
with SBI Capital Markets, the Reliance brand would help
BSES to raise more funds than envisaged earlier. It
would therefore make sense for BSES to hold its resources
sources say the financial institutions (FIs) that hold
around 36-per cent stake in BSES are not very happy with
the offer price of Rs 230.10 per share as it is lower
than the last offer which was made at Rs 255 per share.
Among the FIs,
Life Insurance Corporation (LIC) and Unit Trust of India
(UTI) are the biggest stakeholders in BSES. LIC holds
15.42 per cent stake in BSES while UTI holds 8 per cent
in the power utility.
Others are Oriental
Insurance Company (3.09 per cent), New India Assurance
(2.6 per cent), National Insurance Company (2.51 per cent),
United India Insurance (1.57 per cent), General Insurance
Company (1.65 per cent) and IDBI (1 per cent).
officials say the company has not yet evaluated Reliances
offer and no decision has been taken so far. If LIC and
UTI collectively agree on selling their stakes, it will
be easier for Reliance to see its offer go through.