IVRCL promoters to wait and watch

The promoters of infrastructure company IVRCL Ltd have decided to “wait and watch” whether Subhash Chandra’s Essel Group would take any step to raise its holding in the Hyderabad-based company.

The group’s announcement last week that it had raised its stake in IVRCL to 10.19 per cent raised questions on whether this was a prelude to a takeover of the roads-to-townships builder.

These questions stem from the fact that the Essel Group’s stake in IVRCL is close to the promoters’ holding of 11.19 per cent. Besides, the group, which has Essel Infra Ltd in its fold, stated the acquisition was in line with its philosophy to grow its infrastructure business in India.

“It’ll 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 group has 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 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 for finance and group chief financial officer K Balarami Reddy had earlier said none of the institutional investors, which held over 42.5 per cent stake in the company, had “dissatisfaction” with the present management. Hence, he was confident they would go with the company promoters in case of any hostile takeover bid.

The IVRCL scrip closed 5.13 per cent up at Rs 69.65 on the Bombay Stock Exchange.