After a brief lull, listed companies made open offers worth Rs 588 crore to public shareholders in October, the second highest level seen in the first seven months of current financial year. According to the latest data compiled by Securities and Exchange Board of India (Sebi), the capital markets regulator approved a total of six open offers for shares worth Rs 588 crore in October compared to two public offers with total value of Rs 13.7 crore in the preceding month.
The value of open offers in October is the second highest for a month in 2014-15 after open offers worth Rs 12,549 crore in June. The value of open offers during April-October 2014 touched Rs 13,588 crore. However, the total value till October this year is 66 per cent less than Rs 39,789 crore of open offers witnessed in the same period year-ago. 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 publicly listed companies. As per the data, most of the open offers in October were meant towards change in control of management. A total of five issues worth Rs 571 crore were made towards this objective.
One open offer issue valued at Rs 17 crore was made with the objective for substantial acquisition of shares while no offer was made towards consolidation of holdings in the month. Securities and Exchange Board of India (Sebi) rules require a mandatory open offer for minority shareholders in the event of any major change in the promoter holding of a listed company, including in the wake of any direct or indirect acquisition of 25 per cent. Such open offers are required for acquisition of up to 26 per cent stake from public shareholders.