Murugappa Exempted From Offer

The Securities and Exchange Board of India (Sebi) has granted exemption to the Murugappa Group from making a public offer in respect of the proposed acquisition of 9,92,680 Tube Investment India Ltd (TIIL) shares representing 4.03 per cent of the company's capital.

The acquirers have been advised to complete the process of acquisition within 30 days from the date of the order (May 24, 2001) and confirm compliance.

The Murugappa Group submitted an application in January 2001 to Sebi seeking exemption from making a public offer in respect of their proposed acquisition of TIIL which is a member of the Murugappa Group. The acquisition is proposed to be done through T I Diamond Chain Ltd and New Ambadi Estates Pvt Ltd (NAEP).

TI Grp Plc and Murugappa together hold and control 33.56 per cent equity capital of TIIL. The Murugappa Group holds 29.53 per cent in TIIL, while 4.03 per cent is with TI Group Plc through its wholly owned subsidiary TI International Holdings Ltd (TIIH).

It was stated in the application that the proposed transfer of shares would not alter the promoters' stake which will remain at 33.56 per cent. It was further stated that the proposed acquisition is an inter transfer of shares between promoters and, hence, would qualify for exemption.

The application of Murugappa Group was forwarded to Sebi's takeover panel which recommended grant of exemption in view of the fact that the transferor is holding 4.03 per cent equity capital in TIIL, which is slightly lower than the requirement of the critical five per cent. The proposed acquisition will not alter the total promoter holding of approximately 33.56 per cent.