In a move that won’t even occur as a stray thought in the minds of the hundreds of families that own companies in India, the promoter-shareholders of Infosys want to know how to become part of its ordinary shareholders.
“The founders have requested the company to seek appropriate classification of their revised status. The company is in the process of seeking appropriate regulatory guidance,” stated Infosys last week.
A total of 19 individuals form the promoter group, presently holding 15.94 per cent of Infosys’ equity. Narayana Murthy, Nandan Nilekani, K Dinesh and S D Shibulal have two children each. The holding of the single-child Gopalakrishnan family is more concentrated, making Sudha Gopalakrishnan the single largest shareholder in this group with 12.29 million shares (2.14 per cent).
The remaining 11, including three founders (Narayana Murthy, Shibulal and Dinesh), would not even appear in the quarterly filings, as their holdings are less than one per cent, if the proposal to reclassify goes through.
However as a family, the four Murthys have the largest holding at 4.47 per cent, followed by the Gopalakrishnans (3.41 per cent), Nilekanis (3.34 per cent) Dineshs (2.51 per cent) and Shibulals (2.2 per cent).
It will be interesting to see how this group will vote and use their holding after the reclassification. Assuming they all act as individuals and independent of the others, at some point, the Bangalore Tiger can become a target for an acquisition.
Who could the suitors be? The Life Insurance Corporation of India (LIC), which holds 3.82 per cent, emerges as the largest shareholder. Though the fact that the insurer does not have too much interest in running companies might be comforting, its holding is not big enough to shoo away the barbarians who might arrive at the Electronics City gates.
There are 912 foreign institutional investors which hold a little over 41 per cent. About 16.17 per cent of the company is held by foreigners through American depositary receipts. Individual shareholders have about 10 per cent, with local institutions, trusts and corporate bodies splitting the rest. Rivals, who do not own much, might start nibbling. A price spike could follow.
Two Indian companies have successfully fended off takeover bids. Both companies did not have any identifiable promoters but were led by strong personalities who dug in and fought it out.
They also enjoyed the support of LIC, which held a big chunk. Can Vishal Sikka, whose stock options will vest in due course, be what Y C Deveshwar was to ITC and A M Naik to Larsen & Toubro? He should begin by asking for a meeting with the LIC chairman.
The other, remote, possibility is the return of a smaller group of founders or their family members, bored after not finding anything better to do. They will never run out of promoter families, which take pride in air-dropping their sons and daughters into board rooms, for an excuse.
“The founders have requested the company to seek appropriate classification of their revised status. The company is in the process of seeking appropriate regulatory guidance,” stated Infosys last week.
A total of 19 individuals form the promoter group, presently holding 15.94 per cent of Infosys’ equity. Narayana Murthy, Nandan Nilekani, K Dinesh and S D Shibulal have two children each. The holding of the single-child Gopalakrishnan family is more concentrated, making Sudha Gopalakrishnan the single largest shareholder in this group with 12.29 million shares (2.14 per cent).
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Nilekani (1.45 per cent) is the second largest shareholder, followed by Akshata Murty (1.41 per cent) and Rohan Murty, who holds 7.9 million shares (1.38 per cent). Rohini Nilekani comes next with 1.31 per cent and Sudha Murthy, who famously lent Rs 10,000 to her husband to start the company three decades ago, is the sixth largest promoter-shareholder, with 1.27 per cent. Asha Dinesh (1.23 per cent) and Gopalakrishnan (1.16 per cent) are the others over the one per cent threshold.
The remaining 11, including three founders (Narayana Murthy, Shibulal and Dinesh), would not even appear in the quarterly filings, as their holdings are less than one per cent, if the proposal to reclassify goes through.
However as a family, the four Murthys have the largest holding at 4.47 per cent, followed by the Gopalakrishnans (3.41 per cent), Nilekanis (3.34 per cent) Dineshs (2.51 per cent) and Shibulals (2.2 per cent).
It will be interesting to see how this group will vote and use their holding after the reclassification. Assuming they all act as individuals and independent of the others, at some point, the Bangalore Tiger can become a target for an acquisition.
Who could the suitors be? The Life Insurance Corporation of India (LIC), which holds 3.82 per cent, emerges as the largest shareholder. Though the fact that the insurer does not have too much interest in running companies might be comforting, its holding is not big enough to shoo away the barbarians who might arrive at the Electronics City gates.
There are 912 foreign institutional investors which hold a little over 41 per cent. About 16.17 per cent of the company is held by foreigners through American depositary receipts. Individual shareholders have about 10 per cent, with local institutions, trusts and corporate bodies splitting the rest. Rivals, who do not own much, might start nibbling. A price spike could follow.
Two Indian companies have successfully fended off takeover bids. Both companies did not have any identifiable promoters but were led by strong personalities who dug in and fought it out.
They also enjoyed the support of LIC, which held a big chunk. Can Vishal Sikka, whose stock options will vest in due course, be what Y C Deveshwar was to ITC and A M Naik to Larsen & Toubro? He should begin by asking for a meeting with the LIC chairman.
The other, remote, possibility is the return of a smaller group of founders or their family members, bored after not finding anything better to do. They will never run out of promoter families, which take pride in air-dropping their sons and daughters into board rooms, for an excuse.