Investor Issues
Disinvestment in NALCO, MMTC, SAIL, RCF by March end: Govt

The government had fixed Rs30,000 crore as disinvestment target for the current fiscal. So far, it has been able to realise Rs21,504 crore through stake sale in five companies including NBCC, Hindustan Copper, NMDC and NTPC

The government on Tuesday said it is likely to offload its stake in four public sector undertakings (PSUs)—NALCO, MMTC, RCF and SAIL—before the end of the fiscal 2012-13.

 

“Disinvestment is carried out as per disinvestment policy for the government. In 2012-13, the government is expected to disinvest its stake in four public sector units—MMTC, SAIL, RCF and National Aluminium Company (NALCO)—in the current fiscal,” minister of heavy industries and public enterprises Praful Patel said in a written reply in Rajya Sabha.

 

The government had fixed Rs30,000 crore as disinvestment target for the current fiscal. So far, it has been able to realise Rs21,504 crore through stake sale in five companies including NBCC, Hindustan Copper, NMDC and NTPC.

 

Further, Patel said, the government has approved revival of 32 sick Central Public Sector Enterprises (CPSEs) including HMT Bearings, HMT Machine Tools, Hindustan Salts and British India Corporation as on date.

 

As on 31 March 2011, there were 63 sick CPSEs such as Tyre Corporation of India, ITI and NEPA.

 

The Board for Reconstruction of Public Sector Enterprises (BRPSE), which was set up in December 2004, advises the government for strengthening, modernisation, revival and restructuring of ailing public sector units.

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BSE lowers stock circuit limit of 12 companies

On Monday, nearly a dozen mid-cap and small-cap shares crashed, prompting SEBI to initiate a probe into panic selling triggered by speculation that pledged shares are being sold by certain entities

The Bombay Stock Exchange (BSE) on Tuesday decided to lower circuit limit of scrips of 12 companies, including those which were beaten in the mid-cap crash on Monday.

 

The changes would effective from Wednesday, the exchange said in a circular.

 

BSE has capped the maximum movement in a day at 10% for five stocks—Aanjaneya Lifecare, Bhagwati Banquets & Hotels, Gemini Communications, Sudar Industries.

 

Besides, DB Realty, 7seas Technologies, Bhoruka Aluminium, Broadcast Initiatives, Vardhman Polytex and WH Brady & Co would be allowed an upward or downward movement of 5% in day.

 

BSE also said the circuit limit of Jolly Plastic Industries would be 2%.

 

The exchanges generally lower the circuit filter of a stock as part of their surveillance mechanism to avoid excessive volatility in the share price.

 

On Monday, about a dozen mid-cap and small-cap shares crashed, including Aanjaneya Lifecare which fell by 20%, prompting the Securities and Exchange Board of India (SEBI) to initiate a probe into panic selling triggered by speculation that pledged shares are being sold by certain entities.

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SEBI exempts SPIC promoter from making open offer

According to SEBI, Ashwin C Muthiah (a shareholder of SPIC under the category “promoter and promoter group”) holds 96% of the capital and Valli Ashwin Muthiah holds 4% capital of AMI Holdings

The Securities and Exchange Board of India (SEBI) has exempted AMI Holdings from making an open offer regarding its acquisition of shares in Southern Petrochemical Industries Corporation (SPIC), as the transaction would not result in any change in control.

 

In its order dated 22nd February, the market regulator has exempted “the proposed acquirer, AMI Holdings Pvt Ltd, from the obligation to make an open offer... with respect to the proposed acquisition of equity shares pursuant to the conversion of 3.72 crore warrants.”

 

The promoter group of SPIC holds 41.13% of the voting capital, while AMI Holdings does not hold any shares in the firm as on date.

 

However, AMI Holdings is identified as a company belonging to the promoter group of SPIC which proposes to invest in the warrants to be issued by latter.

 

According to SEBI, Ashwin C Muthiah (a shareholder of SPIC under the category “promoter and promoter group”) holds 96% of the capital and Valli Ashwin Muthiah holds 4% capital of AMI Holdings.

 

“By virtue of the substantial shareholding of the promoter (Muthiah) of SPIC in AMI Holdings, latter becomes a “promoter group” entity of SPIC,” SEBI said.

 

Following the conversion of warrants into equity shares, the shareholding of the promoter and promoter group would increase from 41.13% to 51.91%, while individual holding of AMI Holdings would rise from nil to 18.31%.

 

“...the allotment of warrants and their conversion into equity shares would not result in any change in control in the target company,” SEBI said in its order.

 

“The consequential increase in the shareholding of the promoter/promoter group would also not disturb the minimum public shareholding levels in the target company,” it added.

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