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Sheths hike stake in GE Shipping

Amit Mitra

They picked up 2.36 pc equity for Rs 100 cr in 12 months


Creeping acquisition
Members of the Sheth family have picked up over 44 lakh equity shares.
Whenever there was bulk shopping from the market, there was an increase in the share price.

Mumbai , Aug. 29

Members of the Sheth family, which owns about 26 per cent stake in Great Eastern Shipping, have picked up over 44 lakh equity shares of the company from the secondary market, constituting 2.36 per cent of the total equity during the last 12 months for about Rs 100 crore.

Significantly, the Sheth family started shopping from the secondary market from the first week of September 2005, a few days after the company first came out with a proposal to de-merge its offshore business into a separate company, Great Offshore Ltd.

Increasing stake

Mr K.M. Sheth, Executive Chairman of the company, picked up 8.31 lakh shares during the last six months at an estimated average price of Rs 230 per share.

His son, Mr Bharat Sheth, Deputy Chairman and Managing Director of the company, notched up 21.95 lakh shares between September 2005 and August 2006 at about Rs 220 per share. His other son, Mr Ravi Sheth, who was inducted into the board of the company only on January 30, 2006, accumulated 14.10 lakh shares during this period at the same price of Rs 220.

Mr Vijay Sheth, cousin of Mr Bharat Sheth, did not increase his holding during this period, but on August 21, 2006 picked up 16,750 shares at a price of about Rs 257 per share. Ms Asha Sheth, sister-in-law of Mr K.M. Sheth, also gathered 35,000 shares during the last six months at an estimated average price of Rs 260 per share.

Thus, the Sheth family together picked up a total of 44.93 lakh shares, which constitutes 2.36 per cent of the total equity of 19.03 crore shares.

Share price

After their shopping spree, the holdings of the Sheth family are now as follows: K.M. Sheth 5.82 per cent, Bharat Sheth 6.4 per cent, Ravi Sheth 6.96 per cent, Vijay Sheth 1.87 per cent and Asha Sheth 1.35 per cent.

Expectedly, whenever any member of the Sheth family did some bulk shopping from the market, there was a perceptible increase in the share price. For example, after Mr Bharat Sheth picked up about four lakh shares in the first fortnight of August 2006 at an estimated average price of Rs 252, the share price increased to Rs 257 on August 22. Similarly, Mr Ravi Sheth picked up about three lakh shares in June 2006 at an average price of about Rs 210 and on July 3 the share price rose to Rs 230, sources said.

Asked whether the promoters were looking at increasing their stake further in the company, Mr Rajat Dutta, General Manager, told Business Line that: "The promoter family has increased its holdings through creeping acquisitions over a period of time to reach the current level of shareholding. Whether to increase from the current levels, when and to what extent would be a function of their individual investment analysis, judgement and rationale."

Competitive business

In another significant development, even before the de-merger, Great Eastern Shipping has, through its subsidiary, Great Ship India Ltd, participated in the recent ONGC offshore tender, offering 14 vessels in 19 slots. This was against 12 vessels in 16 slots offered by the company's offshore division, which is being hived off into a separate entity, Great Offshore Ltd. In other words, the company's subsidiary will, in the future, compete with the de-merged entity in the offshore business.

Among the other bidders for the ONGC tender, SCI offered 14 ships, Tag Sea Logistics of Essar six, Varun four and Garware Offshore three ships.

Related Stories:
GE Shipping de-merger plan may go off course
GE Shipping split: No large cash transactions likely
GE Shipping board approves demerger of offshore services

More Stories on : Mergers & Acquisitions | Shipping | Stocks

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