Surat Textile Mills to reduce promoter holding through OFS

Company currently has the promoter holding of 80.85%, which will be brought down to 74.98% post the OFS

In a bid to bring promoter holding within the stipulated limit of 75 per cent in the publicly listed company, the promoters of Surat-based textiles player, Surat Textile Mills Ltd have proposed to sell 5.87 per cent stake in the company through offer for sale (OFS).

The BSE-listed Surat Textile Mills currently has the promoter holding of 80.85 per cent, which will be brought down to 74.98 per cent post the offer for sale.

In a recent filing with the exchanges, the company informed that the promoters of the company and promoter group companies together propose to sell an aggregate of 1,30,44,142 equity shares of face value of Re 1 each constituting 5.87 per cent of the paid up equity share capital of the company on May 8, 2013.

"The sale shall take place on the separate window of the Stock Exchange and shall commence on May 08, 2013 at 9.15 am and shall close on the same day at 3.30 pm," the company filing said.

The floor price for the OFS shall be disclosed on May 7 after the closure of the trading hours of BSE, the company informed.

As per the Securities and Exchange Board of India (SEBI) regulation, promoters of listed private companies would need to bring down promoter shareholding to below 75 per cent by June 2013. As per the current shareholding of the company, domestic institutional investors hold 7.86 per cent in the company, while others hold 11.29 per cent.

For the financial year 2011-12, Surat Textile has posted net profit of Rs 19.78 crore on the revenues of Rs 188.42 crore. In the December quarter of 2012-13, company's net profit stood at Rs 3.6 crore on revenues of Rs 58.7 crore.