Odd Lot Issue May Snowball Into Major Crisis

According to data in the Eveready Industries annual report for 1995-96, as much as 56 per cent of the company's equity base is held by shareholders who own between one and 100 shares and most of these minuscule holdings would be in odd lots.

Now, with the merger announced yesterday in a ratio of two Eveready Industries shares for three Mcleod Russel ones, there is bound to emerge a fresh set of odd lot shares.

Aditya Khaitan, one of the directors on the Mcleod Russel board dismissed any immediate notions of forming a trust along the lines of those formed in the case of previous mergers (the notable case in point being that of Hindustan Lever and Brooke Bond Lipton India Ltd).

 

This might further compound the problem of marketability, say stockbrokers. One of the problems of both Mcleod Russel, once a heavily traded bluechip tea scrip, and battery major Eveready Industries (erstwhile Union Carbide India Ltd) is that neither is traded heavily on the stock markets.

Quotes are barely available at the Calcutta Stock Exchange, and the Bombay Stock Exchange also witnesses only marginal trading in the scrip. The Eveready annual report shows that 32.16 per cent of the company's stock is owned by 5,567 shareholders who possess between one and 50 shares