The Hindu Business Line : TTK Healthcare open offer not fully subscribed

The open offer for 20 per cent stake in TTK Healthcare by its promoters - TT Krishnamachari & Co (TTK & Co) - has not elicited full response from the non-promoter shareholders.

Though the company has not officially spelt out the outcome of the open offer, which closed on October 7, according to merchant banking sources close to the development, the promoters are likely to come up with a revised offer in view of a partial response. The open offer had opened on September 18, 2006.

According to the declared shareholding pattern, TTK & Co held 51.02 per cent in the company as on September 30, 2006. But with members of the promoter family, the total stake controlled by the promoter group was placed at 62.57 per cent.

To reach this level of holding by the promoter group, in the quarter to September 30, 2006, TTK & Co was allotted 15 lakh shares of the company of Rs 10 each at a price of Rs 73 per share on preferential basis.

Through the open offer, the promoters had intended to acquire 16,22,083 fully paid-up shares representing 20 per cent of the expanded equity capital (after the preferential issue) of TTK Healthcare, also at a price of Rs 73 each. It is understood that the promoters currently control around 75 per cent stake in the company.

According to market sources, the primary reason for lukewarm response to the open offer was that the offer price did not reflect the market perceived valuation of the company.

"TTK Healthcare owns real estate in Bangalore worth around Rs 100 crore, which alone, brought down to the level of a share, could be in the region of Rs 100 per stock. This apart, the debt-free company has prized product portfolio. Going by the sales trend in the first two quarters of the current fiscal, the company is expected to report a significant jump in the whole year - approximately to Rs 250 crore up from Rs 190 crore last fiscal," commented a fund manager of an institutional investor.

"Sales to market cap ratio is very low making it one of the cheapest among the pharmaceuticals stocks," said an analyst with a brokerage firm.

Interestingly, the company has sought shareholders' approval through postal ballot for disposing of its medical devices / disposables manufacturing outfit along with its assets at Waluj in Aurangabad.

More Stories on : Open Offers | Medical & Surgical Equipments

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