The Securities and Exchange Board of India (Sebi) has rejected the proposal of HBL Nife Power Systems Ltd to buy back up to 28.15 lakh equity shares from the shareholders.
The company at its board meeting on April 26 proposed to buy back shares on a tender basis at a price not exceeding Rs 27 a share.
However, the markets regulator rejected the proposal on the ground that the public shareholding in the company is already well below the stipulated 25 per cent.
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The pubic holding in the Rs 20 crore paid-up capital of the company stood at 15.60 per cent as on March 31,2002. While the promoters hold 76.38 per cent in the company, two foreign investors -- Swedg Fund, a Swedish investment firm and Sab Nife AB, a Swedish collaborator -- together hold 8 per cent stake. The company had planned to buy the entire 16 lakh shares held by the two foreign investors through the buyback offer.
The board of the company, at the time of approving the buyback, thought to keep the minimum 10 per cent stake with the public post-buyback to keep the shares listed on the bourses. At present, its shares are listed on the Bombay Stock Exchange and the Hyderabad Stock Exchange. The company's shares are currently traded at around Rs 22.
Confirming the development, C Purushotham, the company secretary of HBL Nife said the company is contemplating moving the appellate authority on Sebi's decision. " We feel that minimum 10 per cent public holding is enough to keep the shares listed," he added.
HBL Nife, a city-based company manufacturing various types of industrial batteries, power electronics, posted a net profit of Rs 11.54 crore on a turnover of Rs 176 crore for the fiscal 2001-02.