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Chennai-based TTK Healthcare has announced that its promoters have proposed to acquire all the equity shares held by public shareholders and file for voluntary delisting of its shares from the stock exchanges.
In a regulatory filing, the company shared an initial public announcement filed by Inga Ventures, manager to the delisting offer, under Regulation 8 of SEBI’s (Delisting of equity shares) Regulations.
As per the announcement, TTK Healthcare promoters TT Jagannathan, TT Raghunathan, and TT Krishnamachari & Co., represented by its partners - TT Jagannathan, TT Raghunathan, Latha Jagannathan, Bhanu Raghunathan, TT Mukund, TT Lakshman, TT Venkatesh and TT Sriram, have expressed their intention to acquire all the equity shares held by public shareholders either individually or collectively together with other members of the promoter group.
As on date, TT Krishnamachari & Co. holds 67.46 per cent of the paid-up equity shares of the company, while TT Jagannathan and TT Raghunathan hold 5.37 per cent and 0.27 per cent stakes, respectively, in the company. The aggregate shareholding of the promoter Group (including the acquirers) is 74.56 per cent of the paid-up equity share capital of the company.
The development comes just weeks after Sunil Singhania-backed asset management firm Abakkus Asset Manager LLP picked up 1.74 per cent stake in the company. On March 24, Abakkus bought 131,788 equity shares of TTK Healthcare at an average price of ₹911.08 apiece.
Also read: Four Adani listed companies on brink of delisting threshold: Hindenburg Research
Exit route
TTK Healthcare said the rationale for the delisting proposal is to provide an “exit route” for the public shareholders. The company said that post-exit of the human-pharma business, it is left with a host of consumer product lines with a single-digit margin. “In a highly competitive environment as well as B2B and white-label businesses that require separate attention and significant cash outflow,” it added.
The TTK Group began its journey as an importer of Woodward’s Gripe water in 1930. Since 1959, it began distributing and manufacturing Woodward’s Gripe water under the pharmaceutical arm, TTK Healthcare. Today, the company has several business divisions such as consumer products, personal products, foods, medical devices, animal welfare products to name a few.
In March 2022, TTK Healthcare announced that its board has approved the sale of its human pharma business to BSV Pharma ., for ₹805 crore.
It further said, the promoters also perceive that any long-term business plan would involve rationalisation of certain portfolios, expanding operations into new product categories and new business activities, which may have different risk profiles, funding requirements, and longer gestation periods compared to the current risk profile of the company, and it would be more prudent to preserve the cash.
“Promoters believe that instead of subjecting the public shareholders to uncertainties it would be fair to provide them an exit opportunity through a delisting offer,” it added.
Post-delisting, the promoter group will obtain full ownership of the company, which in turn will provide enhanced operational, financial, and strategic flexibility.
Also read: Stocks that will see action on April 6, 2023
Price consideration
The company said the consideration price will be determined through the reverse book building process specified in Schedule II of the Delisting Regulations, after fixation of the ‘floor price’ which will be determined in terms of Regulation 20(2) of the Delisting Regulations read with Regulation 8 of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011.
Meanwhile, the shares of TTK Healthcare hit a 52-week high of ₹1,450 apiece on BSE during the intraday trading. It closed at ₹1,295.95 per share, 3.12 per cent over previous day’s close. On NSE, it touched a high of ₹1,474 apiece before settling at ₹1,303 per equity share.
The company has convened a Board meeting on April 20 to decide on the delisting and few other proposals.
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