Financial Daily from THE HINDU group of publications
Sunday, Dec 07, 2003
Financial Daily from THE HINDU group of publications Sunday, Dec 07, 2003 |
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Corporate
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Open Offers Markets - Stock Markets Punjab Tractors climbing up — Poor response to open offer Our Bureau
New Delhi , Dec. 6 THE increase in stock prices of Punjab Tractors Ltd over the last four months, given the company's poor financial condition, has stumped market watchers. So much so, that the open offer by the UK-based private equity investor CDC Capital Partners in the company for an additional 20 per cent stake has received only a tepid response. According to a communication to the Bombay Stock Exchange , against the proposed open offer, which opened in mid-September and closed a month later, CDC has only been able to acquire 0.2 per cent shares. Similarly, against the proposed open offer for 20 per cent in Swaraj Engines and Swaraj Mazda, the company could acquire only 0.13 per cent and 0.41 per cent shares, respectively in the open offer period. The reason lies in the stock price movements of the companies concerned. While CDC made an offer price of Rs 153 for Punjab Tractors, the latter's stock price had been trading at levels above Rs 220 during the open offer period. Similarly, for Swaraj Engines and Swaraj Mazda, when the offer price was at Rs 205 and Rs 140, respectively, the shares were trading at Rs 215-235 and Rs 180-195 levels, respectively on the BSE. Consequently, neither individual nor institutional investors exhibited much interest in the offer. Punjab Tractor's stock price has been on an upward climb ever since CDC won the bid for the Punjab Government's 23.5 per cent stake in the company. The price crossed the Rs 250 mark last week on the BSE, closing at Rs 249.15 on Friday. A few market analysts have suggested that active buying by foreign institutions could be driving the stock price.
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