To comply with the Securities and Exchange Board of India (Sebi)’s 25 per cent minimum public shareholding requirement, promoters of Gillette India on Wednesday offloaded 8.77 per cent stake in it. US-based Procter and Gamble and domestic promoters Saroj Poddar-led Poddar Heritage Group sold 2.85 million shares through an offer for sale (OFS), which was subscribed 1.36 times.
The OFS received most bids at Rs 1,925.66, much higher than the floor price of Rs 1,650, helping the promoters raise about Rs 550 crore. Shares of Gillette India, which had initially opened weak, closed at Rs 2,057.7 on BSE, up five per cent. Following, the stake sale, promoter holding in Gillette India would fall from 88.76 per cent to 79.99 per cent. An additional 4.99 per cent stake held by the Poddars will be reclassified as non-promoter shareholding, subject to the fulfilment of conditions laid down by Sebi.
After they relinquish control and other rights in the company, the Poddars, the founding partner in Gillette India, will be treated as a public shareholder. Gillette India Chairman S K Poddar and his son Akshay Poddar, a director on the company’s board, will have to step down. The Poddars will also give up their statutory and contractual rights in the company and their shareholder agreement will cease to exist.
Earlier, Sebi and Gillette India were at odds over the manner in which the latter wanted to reduce promoter holding. After the company moved the Securities Appellate Tribunal against Sebi, the tribunal dismissed Gillette’s appeal. In September, Sebi had approved Gillette India’s revised proposal to meet the minimum public shareholding norm.
The deadline to comply with the norm ended in June. Gillette India was among more than 100 companies that failed to adhere to the norm by the deadline. Sebi has put a freeze on the voting rights on partial promoter holding in Gillette India and imposed restrictions on corporate benefits.
