The Hindu Business Line : Promoters not to pare stake in Rajesh Exports

Bangalore, Sept. 18 Foreign investors are showing interest in picking up stake in Bangalore-based jeweller Rajesh Exports. Ruling out any plans to shed promoters’ stake (63 per cent) in the company, Mr Rajesh Mehta, Chairman, Rajesh Exports, said: “We have been receiving enhanced interest from all kinds of foreign investors (both existing and new investors) including FIIs (foreign institutional investors) and funds which want a large chunk in the company. But the promoters (within the family) will continue to hold their stake. Foreign investors will have to pick up stake from the open market.”

Following increased foreign interest, the board of Rajesh Exports at its board meeting has approved to raise the ceiling of shares held by FIIs from 20 per cent to 49 per cent. Merrill Lynch, Goldman Sachs and Citigroup hold stake in Rajesh Exports.

The board has also decided to raise the share holding limit of NRIs/PIOs (Non-Residential Indians and People of Indian Origin) from 10 per cent to 24 per cent. The decisions of the board will be subject to the approval by the members at the AGM to be held on September 22, said a press release.

Mr Mehta said the company might in future consider demerging its various operations — retail, exports and real estate. The company’s board has decided to appoint Ernst & Young as an independent agency to “evaluate the true enterprise value of the company’s business, the true value of the real estate and the value of other hidden assets of the company.” Rajesh Exports’ revenue for fiscal year 2006-07 was Rs 6,893.36 crore.

The stock has been witnessing a sharp run in recent time. It gained 11.60 per cent over a week and 53.60 per cent over a month’s time. However, today, the stock slipped by one per cent at Rs 779.05. Trading volumes surged to 4.89 lakh shares against its two-week average of 2.13 lakh shares. On the NSE, the stock dipped by 1.25 per cent at Rs 778.25 with 7.51 lakh shares changing hands. About 22 per cent of traded shares on the NSE was presented for delivery.

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