IVRCL to thwart hostile bid by Subash Chandra’s Essel Group

IVRCL is garnering support from local rivals to thwart a hostile takeover from Essel Group, after the Subash Chandra-run company yesterday acquired a 10.19-per cent stake in the Hyderabad-based infrastructure firm.

Around six Andhra Pradesh-based infrastructure companies have agreed to back IVRCL founder Sudhir Reddy, and are willing to lend money in order to fend off a hostile takeover from the Essel Group, which has threatened to buy more shares, The Economic Times today reported, citing people close to IVRL.

''In line with the philosophy to grow the infrastructure business to match and benefit from the rising proportion of infrastructure investment by India, the Essel Group has acquired a 10.19 per cent stake in IVRCL Ltd and is keen to increase it and is in the process of increasing it,'' Mumbai-based Essel had said in a statement yesterday.

With IVRCL's current market capitalisation at around Rs1,612 crore, Essel's stake is valued at about Rs160 crore.

The companies that are backing IVRL have jointly bid with IVRCL for many projects, and are willing to lend Rs100-200 crore each to help Reddy increase his holding in the company from the present 11.2 per cent, said the paper.

Several sub-contractors are also ready to chip in if Reddy wants to prevent a hostile takeover, the paper added.