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Sowmya Sundar

KADRI Mills is a Coimbatore-based cotton yarn manufacturing and trading company. The acquirers had made an open offer for 22.77 per cent of the equity at Rs 5.5 in January 2001. The offer was stalled due to low pricing. Now, the company has again made an offer for 22.77 per cent equity at Rs 26 per share.

In addition, the shareholders will also be paid Rs 4.17 per share as interest for the delay, taking the total payout to Rs 30.17 per share.

The promoters and persons acting in concert own 74.88 per cent of the equity and propose to acquire 2.34 per cent equity. The offer is made to consolidate their holding in the company. The business environment has undergone a sea-change in the previous year and most textile stocks have undergone a re-rating.

Kadri Mills, too, underwent a drastic change as higher turnover and reducing debt resulted in a manifold jump in earnings.

Despite showing a sweeping change in fundamentals and financials in 2002-03 compared to the previous year, shareholders of Kadri Mills can tender the shares as it is not listed in the primary exchanges-BSE and NSE. It is listed only at the Coimbatore and Madras stock exchanges. Further, given the low equity base of 2.78 crore, the trading opportunities in the stock are limited. The offer is priced at three times the 2002-03 per share earnings. Given the external constraints, shareholders can tender the shares.

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