Over 90% stocks rally on open offer move
Stock prices of companies which announced open offer have seen sharp appreciation in the recent past. A study of around 30 companies that announced open offer so far this year, reveal that share prices of over 90% of the companies rose significantly between the announcement date of the open offer and the day offer started. The scrips of 69% companies made spectacular climb after the completion of open offer process till date.
Satyam Computers, now known as Mahindra Satyam, zoomed 72% on June 12, from its close on the announcement of offer on April 22. Tech Mahindra initiated an open offer at offer price of Rs 58 per share, to infuse Rs 1,757 crore in the company for 31% stake. However, the open offer failed as Tech Mahindra was able to buy only 0.1% stake in the proposed 20% open offer.
| Stock price movement after offer closes till date | |||||
| Company Name | Open Offer Price | Offer Closed | Price on Offer Closes | 10-August, 2009 | % Gain / Loss from offer close till Aug 10 |
| Satyam Computer | 58.00 | 7/1/2009 | 73.55 | 101.95 | 38.61 |
| Surana Inds | 158.30 | 6/2/2009 | 138.15 | 144.00 | 4.23 |
| Spice Mobiles | 10.90 | 6/30/2009 | 16.65 | 14.46 | -13.15 |
| Bombay Rayon | 185.00 | 6/10/2009 | 235.50 | 174.40 | -25.94 |
| Novartis | 351.00 | 6/8/2009 | 409.40 | 428.00 | 4.54 |
| Pfizer | 675.00 | 7/4/2009 | 781.15 | 773.75 | -0.95 |
| Falcon Tyres | 151.71 | 6/10/2009 | 149.00 | 890.00 | 497.32 |
| Avery India | 62.50 | 1/28/2009 | 72.70 | 132.10 | 81.71 |
| Mounteverest Trading | 27.10 | 4/23/2009 | 76.35 | 295.30 | 286.77 |
| Ciba India | 20.00 | 6/23/2009 | 229.20 | 210.00 | -8.38 |
| Rane Brake Lining | 50.00 | 5/19/2009 | 48.95 | 68.80 | 40.55 |
| (data-BS research bureau) | |||||
Surana Industries skyrocketed 63% to Rs 132 on the day offer commenced on May 14, from the declaration of open offer. The company announced to acquire a 20% stake at an offer price of Rs 158 on March 27. The scrip rallied to its all-time high of Rs 145 on June 5.
Falcon Tyres witnessed a steep spike - a five-fold increase - in its stock price to touch its life-time high at Rs 890 on August 10, after the closure of the open offer, although it gained only 1% between the announcement and start of the offer. The Singapore-based Wealth Sea earlier held 74.82% stake in the company, and later on acquired 11.6% of the stake through its open offer at the offer price of Rs 151.71 per share.
Avery India mounted a steep climb of 82% to Rs 132 yesterday, after the closure of offer on January 28.
Novartis climbed 21% to Rs 400 on May 20, after the declaration of open offer on March 25. The scrip rallied nearly 5% to Rs 428, post closure of offer on June 8. The company's offer price was revised to Rs 450 per share on May 27, from Rs 351 per share earlier.
| Stock price movement after announcement and start of open offer | |||||
| Company Name | Open Offer Announced | Open Offer Price | Price on annoucement day | Open Offer Starts | % Gain / Loss from date annouced to offer starts |
| Satyam Computer | 4/22/2009 | 58.00 | 46.90 | 6/12/2009 | 71.54 |
| Surana Inds | 3/27/2009 | 158.30 | 81.10 | 5/14/2009 | 62.95 |
| Spice Mobiles | 4/20/2009 | 10.90 | 11.20 | 6/11/2009 | 48.30 |
| Bombay Rayon | 3/26/2009 | 185.00 | 145.90 | 5/20/2009 | 25.09 |
| Novartis | 3/25/2009 | 351.00 | 330.70 | 5/20/2009 | 20.93 |
| Pfizer | 4/17/2009 | 675.00 | 696.35 | 6/15/2009 | 19.31 |
| Falcon Tyres | 5/13/2009 | 151.71 | 148.25 | 5/22/2009 | 0.51 |
| Avery India | 2/18/2009 | 62.50 | 54.80 | 11/25/2008 | 12.41 |
| Mounteverest Trading | 3/3/2009 | 27.10 | 76.75 | 4/4/2009 | -32.51 |
| Ciba India | 4/11/2009 | 20.00 | 231.45 | 6/4/2009 | 15.42 |
| Rane Brake Lining | 3/3/2009 | 50.00 | 42.90 | 4/24/2009 | 12.47 |
| (data-BS research bureau) | |||||
Spice Mobiles soared 48% to Rs 17 on June 6, the date offer commenced from its announcement. However, the stock experienced a decline of 13.5%, after the closure of offer till date.
Bombay Rayon also exhibited a fall of 26% in its stock price after the closure of its open offer. The scrip, however, zoomed 25% on June 11, the day offer started after the declaration on April 4.
ABG Shipyard and Bharati Shipyard are involved in a bidding war for additional stake in Great Offshore. The open offer as announced by Bharati Shipyard was supposed to be from July 25 to August 13. But the company has yet to get the mandatory approval from the market regulator, so the bid has yet to start. ABG Shipyard has announced its open offer for August 13 to September 1 and it is also waiting for approval.Since there had been frequent revision in offer prices by the bidders, The Securities and Exchange Board of India (Sebi) may give parallel dates to both the companies. Bharati Shipyard, the acquirer of 14.89% stake in Great Offshore made an open offer to acquire an additional 20% stake in the company at Rs 344 a share on June 4.
ABG Shipyard, a rival of Bharati, made a counter-offer to acquire 33.8% in Great Offshore at Rs 375 a share On June 23. Bharti acquired another 14.5% stake on the day itself and later on corrected its offer price to Rs 405 per share. ABG Shipyard also increased its holding in Great Offshore by 6%. Following which, the company raised its offer price to Rs 450 per share and within a week to Rs 520 per share.
In the process, the stock of Great Offshore gained significantly and touched its life-time high at Rs 582, on August 6.
(Please note all current prices are as of August 10, 2009).