Public shareholders in listed firms got open offers worth Rs 19,305 crore in the last fiscal, the highest in past four years, and largely dominated by offers made for change of management control at the companies.
A total of 71 open offers, wherein public shareholders are made an offer for purchase of their shares by the acquirer in takeover or other substantial acquisition deals, were approved by Sebi (Securities and Exchange Board of India) in 2011-12, market regulator has said in its annual report.
Out of these, 57 offers were related to takeovers involving change of management control, eight were for the reason of consolidation of holding and six other open offers were made as part of substantial acquisition of shares.
In terms of size of these open offers, total value of 71 open offers in 2011-12 were collectively worth Rs 19,305 crore, as against total offer size of Rs 18,726 crore for 57 offers for change of management control.
The offers worth Rs 19,305 crore in last fiscal marks a four-year high for the Indian capital markets. Prior to this, 2010-11 saw open offers worth Rs 18,748 crore, while the years 2009-10 and 2008-09 had seen offers worth Rs 5,858 crore and Rs 4,711 crore, respectively.
The number of open offers in 2011-12 at 71 was, however, lower than 103 in the previous fiscal.
However, the total figure for open offers in 2011-12 is largely dominated by 6 offers in the first month itself worth Rs 15,027 crore.
Since fiscal 2008-09, the Sebi has approved a total of 349 open offers resulting in offer size of Rs 48,622 crore.
"There has been a steady increase in corporate restructuring by Indian companies to adapt to the evolving competitive landscape," Sebi said in its annual report.
According to Sebi norms, pursuant to substantial acquisition of shares or change in control in a listed company, an acquirer has to make an offer to the public shareholders, known as open offers, so as to give them a fair opportunity to exit the company if they so wish.
Open offers are made with the objective of change in control of management, consolidation of holdings and substantial acquisition in a company.
Sebi said 80.28% of the offers in 2011-12 were with the objective of change in control of management.
Moreover, open offers made with the objective of consolidation of holding stood at Rs 286 crore, while offers for substantial acquisition was Rs 294 crore in 2011-12.
Further, automatic exemptions were granted to 205 open offers with a total size of Rs 12,119 crore in 2011-12.