Open offers touch 2-month high of Rs 1,060 cr in Oct

After two months of lull, open offers by listed companies crossed the Rs 1,000 crore level, largely on account of share purchase by HT Global in Hexaware Technologies.

As per Sebi's latest monthly report, the market regulator approved two open offers for shares amounting to Rs 1,060.15 crore in October, made towards consolidation of holdings.

In August and September, shareholders had got open offers worth just Rs 106 crore and Rs 317 crore respectively.

 With this, the cumulative value of open offers made during the April-October period of current financial year has reached Rs 39,789 crore through 48 issues.

One of the open offers in October was made by HT Global IT Solution Holdings, an affiliate of Baring Private Equity Asia, to buy 26% stake in the outsourcing firm Hexaware from minority shareholders.

A total of 7.83 crore shares of Hexaware were acquired by HT Global at average price of Rs 135 apiece amounting to nearly Rs 1,058 crore. The offer opened on October 25 and closed on November 8, 2013.

The deal wherein Baring has acquired a controlling stake in Hexaware has been pegged as one of the largest in the Indian IT services space.

The second open offer which was much smaller compared to Hexaware was made by Shriram Credit to acquire 15.60 lakh shares (or 26% stake) of Shriram Asset Management, the only listed asset management company in the country.

The shares were offered at an average price of Rs 18 apiece, valuing the open offer at Rs 2.43 crore. The offer opened on October 24 and ended on November 7, 2013.

Open offers are made by company promoters and other entities for either consolidation of their holdings, as part of substantial acquisition or change in control of management in listed firms.

The Securities and Exchange Board of India (Sebi) rules require mandatory open offer for minority shareholders in the event 0of any major change in the promoter holding of a listed company, including in the wake of any direct or indirect acquisition of 25%.

Such open offers are required for acquisition of up to 26% stake from public shareholders.

Of the 48 open offers approved by the market regulator in the first seven months of 2013-14, a majority (46) valued at Rs 10,522 crore have been made for consolidation of holdings, while one offer each has been towards substantial acquisition and change in control of management.

Meanwhile, open offers made by Mahindra Forgings and Mahindra Composites had closed on October 11, 2013.