The holding of Pentamedia Graphics Ltd promoter V Chandrasekaran has come down to 3.11 per cent from a high of 13.5 per cent in 1997.
The promoter holding fell by more than half when V Ramakrishnan, brother of V Chandrasekaran, decided to pull out of Vesa Holdings Pvt Ltd, the holding company of Pentamedia, , the Chennai-based Rs 580 crore entertainment graphics major, in 1997.
Between them, they held around 27 per cent of equity in 1997 and subsequently, the promoter holding was reduced to 13.5 per cent.
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V Chandrasekaran, chief executive officer (CEO) of Pentamedia, said that his stake in the company had come down mainly because of equity expansion and claimed that he had not sold any of his personal holding since the Initial Public Offer (IPO) in 1992. He also denied having pledged any part of his stake with banks at any point of time.
He said, "Though I personally hold 3.11 per cent stake in Pentamedia, my other family members and friends collectively held 16.71 per cent of the total equity". At present, financial institutions hold 9.55 per cent of equity and Indian public hold 56.88 per cent in Pentamedia.
On the issue of a buy back and why the company had not contemplated a buy-back considering the fact that it was sitting on about Rs 100 crore in cash reserves , he remarked that all along the company was planning to go for an American depositary receipts (ADR), but a buy back would not have been viewed favourably by the investing public in the US.
"When ADRs issue were planned, financial advisors advised me that US investors would not factor-in promoter buyback favourably. I would explore this option of buy-back at the right time," he said.
S Ramasamy, company secretary & GM- corporate finance, said, "As part of the deal, V Ramakrishnan was allowed to sell his stake in the market. He might have sold his shares and this might have created the opinion of promoter offloading his stake".
He said that acquisition of Improvision Technologies and three other Indian companies along with allotment of 12.7 million GDRs at the rate of $1.50/GDR for cash to investors GDR issue had diluted the promoter stake to 3.11 per cent.
Even in Pentasoft Technologies, where Pentamedia Graphics is the promoter, the promoter holding has fallen by 45 per cent to 27.04 as on June 30, 2001 as per the company filing with BSE. The latest shareholding pattern of the company was not known.
Incidentally, institutional investors have reduced their exposure in both the companies- Pentamedia Graphics and Pentasoft Technologies. In Pentamedia, they had reduced their exposure to 9.55 as on September 2001 as against 22.04 per cent in March 2001. In Pentasoft, their stake as on June 2001 stood at 9.4 per cent as against 17.72 per cent as on March 2001.