Sebi amends takeover code
Mumbai - The Securities and Exchange Board of India (Sebi) has amended the Takeover Code. Thus now corporates are exempt from making a second open offer for acquiring additional shares of a public sector undertaking (PSU).
Sebi has ruled out the possibility of a counter offer at the time of the open offer being made by a company to acquire shares of a PSU from the public.
According to Sebi officials, the counter bid cannot be made at the time of making the first open offer as the selection of buyer of government stake was made after competitive bids. In case the counter bid option is available, this could affect the disinvestment process as the unsuccessful bidders would like to take the opportunity to make the counter bid.
These changes are part of the notification for amendment of Sebi (Substantial Acquisition of shares and takeover - Amendments) Regulations 2001.
All corporates successful in buying the government stake would have to comply with the takeover code and in case of non-compliance of the code, the share or the control of PSU shall revert back to the government and the companies would be penalised by the government.
Sebi has also decided not to exempt companies from making the open offer in case of corporates buying the government stake in PSU through the disinvestment process.
According to the regulator, the open offer has to be made by the buyer of government stake as PSU are also listed like any other company and are being regulated by the Sebi Act.
But PSUs has been exempted from making an open offer if they are buying government stake in another PSU the rationale being that the PSUs, whose stake have been divested, would still be indirectly controlled by the government.
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Majority stake eludes Britannia promoters
New Delhi - The promoters of Britannia including Nusli Wadia, are unlikely to gain majority 51 per cent stake in Britannia Industries despite the share buyback plan starting on or after September 10.
The announcement by Britannia Industries Ltd (BIL) to go in for a share buyback follows close on the heels of another Wadia group company, Bombay Dyeings buyback proposal, but in the latter, the promoters stake will cross the crucial 51 per cent mark post buyback.
BIL proposes to buy back up to 10 lakh shares at Rs 750 per share for Rs 55 crore.
The Wadia group and Groupe Danone of France together hold the controlling interest in the company, which the promoters and/or persons who are in control and/or acting in concert hold 43.71 per cent equity at present in Britannia Industries. This will go up by a mere 1.8 per cent to 44.89 per cent after the buyback is completed. At present, foreign institutional investors (FIIs) hold 8.92 per cent stake in Britannia; Indian Banks and institutions hold another 19.9 per cent; Indian mutual funds 4.01 per cent; Non-resident Indians and Overseas Commercial Bodies together hold 0.59 per cent, whereas the remaining 22.87 per cent of Britannias equity rests with the public.
The buyback size represents 23.37 per cent of the aggregate of the companys paid-up equity capital and free reserves as on March 31 this year; the maximum number of shares to be bought back represent 3.59 per cent of the paid-up equity capital of the company.
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10 stocks corner three fourths of NSE turnover post badla ban
Mumbai - The introduction of rolling settlement has not resulted in widespread trading across securities, after the ban on various deferral products, clearly indicating that speculation is limited to just handful of stocks and as a result the trading is also concentrating in a select few stocks.
Trading volumes on the National Stock Exchange (NSE) from July 2, indicate that the contribution of top five securities in the total turnover has gone up from 45 per cent in April to 48 per cent in June and further to 55 per cent in July, 2001.
Again the contribution of the top 10 securities to the total turnover also increased from 63 per cent to 72 per cent during the same period.
The top 10 traded securities in July were Infosys (average daily turnover of Rs 225 crore), Digital Equipment (Rs 137 crore), Wipro (Rs 123 crore), Satyam Computer (Rs 111 crore), Global Tele-Systems (Rs 79 crore), Reliance Industries (Rs 58 crore), NIIT (Rs 53 crore), ssi (Rs 38 crore), Zee Telefilms (Rs 38 crore), HFCL (Rs 32 crore).
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