Financial Daily from THE HINDU group of publications
Saturday, Sep 27, 2003
Financial Daily from THE HINDU group of publications Saturday, Sep 27, 2003 |
|
|
|
|
|
Home Page
-
HCV/LCV/Tractors Corporate - Open Offers Poor response to CDC open offer for Punjab Tractors Neha Kaushik
New Delhi , Sept. 26 THE open offer by the UK-based private equity investor CDC Capital Partners in Punjab Tractors Ltd (PTL), for an additional 20 per cent stake in the company, has so far generated a slack response, even as the company's stock price has been climbing. Neither individual nor institutional investors have exhibited much interest in the offer. Despite the poor response to its open offer and the rise in market price, sources say CDC will not be revising its offer price. According to the offer document, CDC has time until October 7 to revise the price if it chooses so to do. The Punjab Tractors stock price has risen from Rs 136.15 on July 29, the date on which the Punjab Government announced the sale of its 23.5 per cent stake in PTL to CDC, to trade upwards of Rs 185 since September 15 on the Bombay Stock Exchange (BSE). Interestingly, this happened even as CDC's open offer commenced on September 18 at Rs 153. The offer would close on October 17. The PTL stock closed on Friday at Rs 188.15 on the BSE. Market sources said that financial institutions, which hold a substantial percentage in PTL, have not yet tendered to the open offer. Analysts point out that it would make little sense for financial institutions (FIs) to sell at the offer price. FIs held about 46.19 per cent stake in Punjab Tractors as on June 30. Some of the major FIs that hold a stake in PTL include UTI (16.24 per cent), GIC (7.95 per cent), IDBI (7.29 per cent) and LIC (14.71 per cent). The recent spurt in the stock price of PTL has surprised market watchers, especially given the current poor financial condition of the company. The company's net profit had declined from Rs 14 crore in April-June 2002 to Rs 5.7 crore in the corresponding period this year. Nevertheless, several market analysts are looking at the strong performance of the stock as part of an overall recovery in the tractors industry given the good monsoons this year. Also, with CDC having a say in the management of PTL, analysts are expecting a better financial performance by the company. CDC had earlier stated that it intends to work with the existing management of the company and aid it in making a mark in the international markets.
Article E-Mail :: Comment :: Syndication
|
Stories in this Section |
|
The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription Group Sites: The Hindu | Business Line | The Sportstar | Frontline | The Hindu eBooks | Home |
Copyright © 2003, The
Hindu Business Line. Republication or redissemination of the contents of
this screen are expressly prohibited without the written consent of
The Hindu Business Line
|