Promoters of Vishal Retail are looking at raising their stake in the company by up to 10 per cent over the next two years via the creeping acquisition route, Manmohan Agarwal, chief executive officer, corporate affairs, said today.
“The promoters are contemplating hiking stake by 10 per cent as allowed by Securities and Exchange Board of India (Sebi) rules. As and when they decide to go ahead, necessary disclosures will be made in this regard,” he said.
According to the current Sebi regulations, creeping acquisition up to 5 per cent in a financial year is allowed to persons holding 55 per cent stake and above but below 75 per cent, if such an acquisition is carried out through open market purchases in the normal segment.
As of September 30, promoters held 64 per cent stake in Vishal Retail. Shares of Vishal Retail did not react to the news of the promoters planning to raise stake through creeping acquisition. At 11:21 am, shares were trading at Rs 102.10 on the National Stock Exchange, down 4.9 per cent from Monday’s close. Agarwal denied reports that the promoters are looking to sell stake to raise funds for expansion.
“Things have changed in the last six months. We have scaled down our projection of expansion plans. We will look at funding options during our next phase of expansion,” Agarwal said. The company is focussing on strengthening its distribution network before embarking on its next phase of expansion.
“...the next phase of expansion is at least two quarters away. It may not be before the July-September quarter of the next fiscal,” Agarwal said.
However, he did not provide any details on the expansion plans for the next phase. The company is likely to miss its earlier revenue guidance of Rs 1,800 crore for the current financial year. For July-September, Vishal Retail reported a net profit of Rs 4.08 crore on a total income of around Rs 361 crore.
