Titagarh Wagons has seen around 3.78 percentage points drop in FII holding in its equity in the fourth quarter to March 31 as compared to the previous quarter. However, holdings of five overseas investors — GE Capital International, 2i Capital PCC, Goya, Strategic Ventures Fund (Mauritius) — remain unchanged.
This is crucial as they have showed support ahead of a proposed merger of Titagarh Steel with Titagarh Wagons. These five institutional investors had invested in Titagarh Wagons before its IPO in 2008. Two of the foreign investors have board berths currently on Titagarh Wagons.
Mr Umesh Chowdhary, Managing Director of Titagarh Wagons, told Business Line that the valuation exercise had begun and the company’s board was likely to take up the valuation report some time in May for further initiating merger proceedings.
Shareholdings
According to latest shareholding data placed before the stock exchanges, GE Capital International continues to hold 13.79 per cent, highest among public shareholder category. 2i Capital PCC, Goya, Strategic Ventures Fund and JP Morgan hold 5.73 per cent, 5.45 per cent, 1.45 per cent and 4.44 per cent respectively.
During the March quarter, Copthall Mauritius Investments, which had 1.67 per cent in the December quarter, exited Titagarh Wagons. Indea Capital Pte also offloaded its 1.76 per cent holding. Macquarie Bank is also absent from the March shareholders list. It had 1.36 per cent stake in Titagarh Wagons in December.
India Fund Inc and India Capital Fund, however, continue to hold Titagarh Wagons in their portfolio as before.
Mr Chowdhary said the five pre-IPO overseas investors were not bound by any lock-in period. “They have not, however, indicated of reducing or offloading their stakes in Titagarh Wagons either.”
The proposed merger, however, would pave way for ARCIL’s stake in Titagarh Wagons, which has 26 per cent stake in Titagarh Steel. Titagarh Steed had come into being after the demerger of the paper mill business of Titagarh Industries. In 2004, ARCIL had acquired Titagarh Industries debts worth Rs 300 crore. Of which debt worth 240 crore was converted into equity.
If the proposed merger was through, ARCIL would have an easier exit route for its current equity holding in Titagarh Steel, as Titagarh Wagons is a stronger company and is more active on the secondary market.
Source: The Hindu Businessline 