Kumar Mangalam Birla's plans to raise the promoters' stake in group companies above 50 per cent or the majority level and is considering purchasing shares of Hindalco, Grasim and Aditya Birla Nuvo from the open market as the prices continue to be under the expectation, said executives close to the development.
"The promoter is looking for funds for creeping acquisitions in the three companies and may also consider buyback of shares," said sources.
The share prices of three companies have fallen by around 75 per cent so far this year. Grasim has plummeted to Rs 939.90 from Rs 3762.40, while Nuvo dropped to Rs 507.50 from Rs 2028.05 since January 2008. Hindalco, which had recently completed the Rs 5,000-crore rights issue, has witnessed a steep fall in share prices this year from Rs 195.35 to Rs 49.85. The group's spokesperson declined to comment on the development.
The promoters of Hindalco Industries had recently increased their stake in the company to 37 per cent from 31.43 per cent through the rights issue. The promoters had subscribed 39 per cent of the issue, while five merchant banks had underwritten 34 per cent of the issue.
Hindalco received only 17 per cent demand for its issue as the rights were priced at Rs 96. The promoter company, IGH Holding, had recently bought 60 lakh equity shares of Hindalco from the open market, which is equivalent to below 0.4 per cent, said sources.
In Grasim Industries, the promoters hold just 25.19 per cent stake. "The position of the promoters is weak in the company, making it vulnerable for any hostile takeover. There will be some quick moves from the promoters’ part to consolidate their position. However, it will take at least three to four years to take the promoter holding in Grasim to above 50 per cent," said sources.
In Nuvo, the yarn-to-fertiliser conglomerate within the Aditya Birla group, the promoters hold 40.20 per cent stake.
