HB moves Delhi High Court against CLB order

HB Stockholdings, the Delhi brokerage that had challenged DCM Shriram Industries Ltd (DSIL) promoters' move to issue preferential warrants to themselves, has appealed to the Delhi High Court against the Company Law Board's (CLB) decision refusing a stay on the warrants issue.

HB has also revised the open offer price to buy 22.88 per cent of DSIL shares from Rs 70 to Rs 120. The matter is expected to come up for hearing on Friday.

"The purpose behind raising the price is to ensure that we are able to garner more shares and increase our stake in the company," said a source close to HB Stockholdings.

The company's stake in DSIL was 12.87 per cent when it announced the open offer last week and is now close to 15 per cent following open market purchases.

The DSIL board had passed a resolution in October allowing the promoters to allot 700,000 warrants to themselves with each warrant to be converted into three shares at different points of time over the next 18 months.

The price for these shares was fixed at Rs 52 but with HB's open offer and petition against warrants, the board raised the price to Rs 90. It also decided to convert these warrants in one go to bring in Rs 18 crore as working capital.

HB Stockholdings, promoted by Harish Bhasin, had filed a petition with the CLB seeking a stay on the move to issue warrants, claiming that it could impact the interests of minority shareholders. The CLB in its decision on Tuesday had refused to grant a stay on the preferential warrants.

A source close to DSIL said that the result of postal ballots will be available on Friday and the allotment of warrants would take place the same day unless the court decides otherwise.

On the Bombay Stock Exchange, DSIL's share closed at a fresh 52-week high of Rs 101.90, up 5 per cent over the previous close. The share has jumped by over 27 per cent in the past week.