The Hindu Business Line : Srei Infra promoters hike stake by 5%; skip warrants conversion

The promoters of Srei Infrastructure Finance have raised their stake in the company by 4.97 per cent to 30.29 per cent of the paid-up capital through market purchases in the second half of March. The promoters, however, skipped conversion of 1.78 crore warrants in issuance and let them lapse in April.

Mr Sunil Kanoria, Vice-Chairman and brother of principal promoter Mr Hemant Kanoria, confirmed to Business Line that the promoters have raised their stake through the creeping acquisition route.

Mopping up of shares

The mopping up of shares from the market has brought down the acquisition cost significantly as the average ruling market price during the fortnight to March 31 was around Rs 25 a share against the warrants conversion price of Rs 100 a share.

The stock’s 52-week low was recorded on March 9 at Rs 22.30. In the past month, the stock has shot up 42 per cent. On Monday, it gained 7.57 per cent to close at Rs 41.90.

Adhyatma Commercial Private Ltd, a PAC, bought 57.75 lakh shares representing 4.972 per cent voting rights in Srei Infrastructure Finance. As a result, the current shareholding of the promoter group has gone up from 24.85 per cent as on early March. The promoter group’s stake on full conversion of warrants, however, would have increased to over 35 per cent. Promoter’s holding had got diluted owing to the GDR issue in April 2005.

On October 30, 2007, Srei Infrastructure Finance had issued 2.5 crore warrants to entities belonging to promoters’ group with an option to apply for and be allotted one share/ warrant within April 29 this year.

Warrants conversion

On March 31, 2008, the promoters exercised option to convert only 72 lakh warrants. The company now has forfeited the subscription money of Rs 17.8 crore for the lapsed warrants. Augmenting holding by promoters through market purchases did not cause equity dilution, but helped market price to firm up.

As a result of conversions on March 31, 2008, however, share capital of Srei had increased by Rs 7.20 crore to Rs 116.29 crore and share premium account rose by Rs 64.80 crore.

Meanwhile, Goldman Sachs has exited Srei in the March quarter, according to the latest shareholding pattern. Last quarter, the FII had 3.54 per cent. Arisag Partners (Asia) Pte Ltd, another FII, has reduced its holding to 1.85 per cent in the quarter to March 31, from 8.01 per cent in the quarter to December 31, 2008.

Sanlam Asset Management (Ireland), however, raised its holding to 8.33 per cent from 7.8 per cent.

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Navin Suri is CEO of ING IM India operations