IVRCL; A DAILY SOAP IN THE MAKING!!!

As all of us are aware by now, the mouth-watering (for Retail Investors and Minority shareholders) possibility of a hostile takeover bid for IVRCL Ltd by Subhash Chandra's ESSEL Group looms large. In the shadow of the possible event, the Scrip Price has been on an upward spiral in the last many trading sessions despite the macro market volatility. The basic reason behind Subhash Chandra's desire for this possible acquisition is his intent to substantially enlarge his footprint in the critical Infrastructure Space. A lot of us may not be aware that the ESSEL GROUP already has a presence in the space through the Group Company ESSEL INFRAPROJECTS LTD which has interests in Roads, Urban Infra, commercial and residential projects, power projects and water management etc. Of course, the presence is not perhaps as substantial, classy and frontline as that of IVRCL and therein lies the Group's desire to leap-frog into the top tier by acquiring a reputed major such as IVRCL.

Looking at the Shareholding pattern of IVRCL, it is obvious that ESSEL have done their homework diligently, since  IVRCLs  Promoter Group led by E Sudhir Reddy holds only about 11.18% currently, thus making it a bit of a sitting duck. Perhaps Reddy has  the intent to up his stake in the Company through a proposed merger/restructuring  with IVRCL ASSETS and few others which would effectively take his stake up to about 13.6%. This would not be enough to stave off the potential hostile bid but could make ESSELs task a bit more difficult. As we all know, ESSEL has already acquired a tad over 10% stake from the open Market.

The key probably lies with the big Institutional Investors who together hold about 42% stake. These include the likes of  a  Norwegian Sovereign Wealth Fund , HSBC Global Investments, ICICI Prudential, Bajaj Allianz, Aviva, Tata Infra Fund, Macquarie Bank etc. Of these, the single largest stake is held by the NORWEIGIAN SOVEREIGN WEALTH FUND which holds about 9.47%, the single largest stake after the current Promoters and ESSEL.

In any case, the battle-lines are tautly drawn with both contenders rallying forces and preparing for what might eventually turn into a bloody bid-off. Either way, it will be the retail investors and minority shareholders who could be laughing all the way to the Bank as the Scrip price jives upwards in sync with the news flow.