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GlaxoSmithKline's $1-billion open offer to raise stake in its Indian arm, GlaxoSmithKline Pharmaceuticals, had received a shot in the arm from foreign institutional investors (FII), shareholding data for the March quarter showed.
Eight of every 10 shares tendered in the open offer, which concluded last month, were accounted for by foreign investors. According to latest shareholding data, FII holding in GSK Pharma dropped from 23.76 per cent in December 2013 to 2.58 per cent in March, the lowest since March 2002. UK-based Aberdeen, the largest institutional shareholder in the pharmaceuticals company, has sold its entire holding, data show. At the end of the December 2013 quarter, the global asset manager had 13 per cent stake in GSK Pharma.
Meanwhile, domestic institutions' holding in the company declined 133 basis points to 8.88 per cent. State-owned insurance majors Life Insurance Corporation (LIC) and General Insurance Corporation (GIC) didn't participate in the open offer; their shareholding remained unchanged quarter-on-quarter.
Analysts said foreign investors' decision to part with their holdings was a wise one, as now, shares of the company were 20 per cent below the open offer price. On Tuesday, the GSK Pharma stock closed at Rs 2,486.8 on the BSE, compared with the open offer price of Rs 3,100.
Through the open offer, the GSK group had acquired 24.33 per cent stake in the company, raising promoter holding from 50.67 per cent to 75 per cent.
GSK's open offer was the fourth by a multinational company since 2013. Of these, GSK Pharma's open offer was the most successful, recording full subscription. The foreign promoter managed to re-purchase all the 23 million shares it had proposed at Rs 3,100 a share, amounting to Rs 6,389 crore.
In June 2013, Unilever had launched a voluntary open offer to buy shares worth Rs 29,220 crore. Of this amount, it spent 67 per cent, as the number of shares tendered was less than what the company was willing to buy.
For GSK Consumer and CRISIL, their promoter multinational companies had launched voluntary open offers. Currently, tendering for an open offer in credit rating firm ICRA, in which US-based Moody's Investor Services has offered to buy 26.5 per cent, is underway.
Analysts said owing to tax implications, only an attractive offer price made tendering shares in an open offer attractive for investors.
