RIL hikes stake in EIH to 14.8%

Reliance Industries (RIL) today said it has hiked its stake in hospitality firm East India Hotels (EIH) to 14.80 per cent, taking the Mukesh Ambani-led firm a step closer to the threshold limit of 15 per cent for making an open offer.

RIL's move comes within two days of announcing its entry into the hospitality sector with the acquisition of a 14.12 per cent stake in EIH, which runs the Oberoi and Trident hotels and resorts.

RIL subsidiary Reliance Industries Investment and Holding on Tuesday bought 26,86,885 additional shares in off-market trade, the company said in a filing to the stock exchanges.

According to industry experts, RIL's latest move is aimed at keeping rival ITC from making an open offer to increase its stake in EIH.

"ITC currently has 14.98 per cent stake and it is very close to the point from where it will be eligible to make an open offer in EIH. RIL might have bought the extra shares to make it more difficult for ITC," Elara Securities Analyst Himani Singh told PTI.

According to Singh, it could also be a move by RIL to secure a seat on EIH's board. "However, I do not think that RIL will make an open offer. In RIL, EIH finds comfort from the financial muscle to counter any such bid from ITC," Singh added.

On Monday, RIL had acquired a 14.12 per cent stake in EIH for Rs 1,021 crore at a premium of 22 per cent per share. The stake has been taken over from the promoters of EIH, who now hold a 32.31 per cent participating interest in the company.

EIH's shares closed at Rs 143.70 on the BSE today, registering a jump of 2.68 per cent over the previous close. Even RIL's shares closed 1.92 per cent higher at Rs 936.45 per share.