After an encouraging response on the first of the buyback offers, shareholders of Alfa Laval have slowed selling of equity in anticipation of higher prices. Since the company's stock has already hit the bottom of the price range on the Bombay Stock Exchange (BSE), investors believe that the company would revise the price band upwards to attract more selling to achieve the regulatory requirement of a minimum 50 per cent of delisting offer.
The current public shareholding is 11.23 per cent equivalent to 2,040,202 shares, the buyback of shares opened on February 15. The issue closes on February 22. For the offer to be successfully delisted a minimum 50 per cent of the shares i.e. 1,020,101 shares should be subscribed to the offer. The company has decided an offer price between Rs 2850 and Rs 3150.
The company, in a statement to the BSE, said that it has received one of the largest responses for the delisting in the first two days between February 15 and 16 with investors tendered 273,986 shares. But towards the end of the third day, the overall share buyback shot up to a mere 17 per cent of the offer. Since, just two days left i.e.
Tuesday and Wednesday, the company may jack up the offer price, an analyst said. The stock market remains closed on Monday. The delisting, however, will sail through, he added.
Shareholders offered most of the offers between the price range of Rs 3000 - Rs 3200. The company had given the indicative offer price of Rs 2850, however, market feels the offer is likely to get completed between Rs 3100 - Rs 3200 per share.
As a consequence, the company may revise the offer price upwards.
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"The stock has already hit the bottom of the offer level to close on Friday at Rs 2854.45 on the BSE. Being a blue chip company, investors await a luring offer to make handsome gain over prevailing price in stock exchange. Hence, we believe the offer price would be revised upwards to a minimum Rs 3300 to attract more shares in coming days," said Dinkar Shanbhag, an analyst with Lotus Global Equities.
Earlier this month, the parent firm had raised the delisting offer price to Rs 2,850 a share from Rs 2,045 a share. In September, 2011, the company's board had accepted the delisting proposal and in October fixed a floor price of Rs 2,045 a share to buy out the outstanding public float.
JM Financial Consultants is the merchant banker assisting Alfa Laval with the delisting offer.
After the successful offer, shares of the company would get delisted from the BSE and the National Stock Exchange (NSE).
Data compiled by the Business Standard Research Bureau showed that Alfa Laval stock has risen 29.48 per cent so far this year outperforming the Sensex and the Nifty. The equity benchmark index gained 18.34 per cent and 20.33 per cent respectively since the beginning of this year.
Alfa Laval, a subsidiary of Sweden-based Alfa Laval Corporate AB, offers heat transfer, separation and fluid handling technologies. At present, the promoter company holds a 88.77 per cent stake in Alfa Laval.
The company posted a net profit of Rs 27.09 crore for the quarter ended December 31, 2011 as compared to Rs 24.30 crore for the corresponding quarter of the previous fiscal, registering a growth of 11.51 per cent. Total income shot up by 30.88 per cent to Rs 311.65 crore for the quarter ended December 31, 2011 as compared to Rs 238.12 crore during the same period last year. The company's EPS during the quarter rose to Rs 14.92 a share from Rs 13.38 a share.