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Lok Prakashan buys 5% in Rallis

Our Bureau  |  Kolkata 

After Voltas it's Rallis. Lok Prakashan, which publishes Gujarat Samachar, has picked up over 5 per cent in Rallis India.

The move is significant as Rallis is the second Tata group company in which Lok Prakashan mopped up shares. Two years ago, Lok Prakashan made headlines by picking up a 14 per cent stake in Voltas.

When contacted, Lok Prakashan Managing Director Bahubali S Shah told Business Standard that he wanted to be a long-term investor on the Rallis counter. Asked about his intention to acquire a sizeable stake in Rallis, he said, "It was a pure investment decision."

Shah, however, declined to reveal his average cost of acquisition. Stock market sources said Lok Prakashan acquired 655,967 equity shares of Rallis, representing a 5.47 per cent stake, over the past several weeks.

The Rallis stock has been hovering around Rs 85 over the past one month. Today, it closed at Rs 85.15 on the Bombay Stock Exchange and Rs 85.25 on the National Stock Exchange, slightly higher than the overnight closing price in an otherwise bearish market.

He also did not wish to comment on whether he intended to further consolidate his holding in the Tata group managed speciality fertiliser and seeds company.

Lok Prakashan started scaling up its holding in Voltas in mid-2001 and stopped at 12 per cent stake. Shah said Lok Prakashan now held 14 per cent, 1 per cent less that the trigger point of a mandatory open offer.

Following his move, the promoters scaled up their holding in Voltas from 20 per cent to the existing 27.74 per cent.

Stock market analysts were a bit confused in finding out the reason why Lok Prakashan stumbled on Tata firms. Shah clarified that Lok Prakashan had holdings in a handful of firms but it had sizeable stake in two companies, namely Voltas and Rallis.

Analysts did not foresee any takeover threat by Lok Prakashan. "Lok Prakash did not mount a takeover bid even when the promoter's holding in Voltas was low. Compared with Voltas, the promoters holding in Rallis is higher which indicates no take over battle at the moment," said an analyst tracking down the Tata

The promoter hold 45 per cent in Rallies. Institutional investors also have a significant share at 14.59 per cent.

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First Published: Sat, November 15 2003. 00:00 IST