The promoters of infrastructure company IVRCL Limited have decided to “wait and watch” whether Subash Chandra’s Essel Group would take any steps to further increase its holding in the Hyderabad-based company.
The announcement of the Essel Group last week that it had hiked its stake in IVRCL to 10.19 per cent had raised questions whether this was a prelude to takeover of the roads-to-townships builder.
These questions stem from the fact that currently Essel Group's stake in IVRCL is close to the promoters holding, which is at only 11.19 per cent. Besides, the group, which has Essel Infra Limited in its fold, stated that the acquisition is in line with its philosophy to grow its infrastructure business in India.
“It will sound premature now, if we react to this development,” IVRCL chairman and managing director, E Sudhir Reddy, told Business Standard on Monday.
According to Reddy, the Essel Group had not increased its stake in IVRCL beyond the 10.19 per cent. "So, how can we accuse anybody (that they intend to take over the company)?"
Emphasising that they had decided not react to Essel’s stake hike at this juncture, he said that the monetary and other implications of Essel's stake hike would be evaluated "only if the latter tried to further increase its holding in IVRCL.”
IVRCL executive director-finance and group chief financial officer, K Balarami Reddy, earlier said that none of the institutional investors, which hold over 42.5 per cent stake in the company, had “dissatisfaction” with the present management. Hence, he was confident that they would go with the company promoters in case of any hostile bid for takeover.
IVRCL’s scrip closed at Rs 69.35 on Monday, up 5.13 per cent against its previous close on BSE.
