Minority shareholding shuffle seen at CG Power; Blue Diamond picks 7% stake

The bulk sale deals in the company scrip seen in the last one week included KKR, Vistra ITCL India and L&T Finance

In less than two weeks after Tube Investments announced a Rs 700-crore deal to take control of CG Power and Industrial Solutions, the company has seen a reshuffle at the minority shareholding level. 

Existing investors KKR, YES Bank and L&T Finance have sold a part of their stake in the open market while new investors like Blue Diamond Properties have stepped in.

 According to data shared with the exchanges, Blue Diamond Properties bought 6.6 per cent stake in CG Power from the open market on Monday. 

Another investor, Singularity Holdings, also acquired 0.6 per cent in the firm the same day.

 In Tuesday’s trade, YES Bank sold 8.3 per cent stake in the company in two tranches, while GDN Investments Private Ltd picked 0.7 per cent stake in the open market. The bulk sale deals in the company scrip seen in the last one week included KKR, Vistra ITCL India, YES Bank and L&T Finance. 

Data compiled from the exchanges shows since August 7, KKR India debt opportunities fund II sold 1.2 per cent stake in the company, KKR Indian Financial Services sold 5. 8 per cent in two tranches, L&T Finance sold 10 per cent in two tranches and Vistra ITCL sold another 0.8 per cent stake.

As of June-end, KKR India debt opportunities fund II held 1.91 per cent of the voting rights, and KKR India Financial Services held 8.10 per cent. 

L&T Finance’s holding as of June-end was 10 per cent, and with its bulk sale in August, L&T Finance made full exit. YES Bank as of June, held 12.79 per cent stake in the company. 

 On August 7, Murugappa Group’s Tube Investments and CG Power said the two companies have entered into an agreement for allotment of equity shares and issuance of warrants, aggregating to Rs 700 crore. 

Post allotment of securities, Tube Investments will acquire control over the company and have the right to appoint majority of the directors on the company board.

CG Power, in August 2019, hit headlines when the company informed the exchanges of a Risk and Audit Committee (RAC) report, which detailed multiple dubious transactions in the company. The report indicated it to be an employee-led fraud.

The RAC report also said the net worth of the company had been understated owing to unauthorised write-offs. 

The findings later led to a Securities and Exchange Board of India (Sebi) ban on promoter Gautam Thapar from accessing the capital markets.