Tata Sons acquires 14.7% stake in Praj for Rs 3.38 bn
Tata Sons acquires 14.7% stake in Praj for Rs 3.38 bn Tata Sons, the unlisted holding company of the Tata group, picked 14.7% in Praj Industries, (Q, N,C,F)* in an open-market transaction totalling Rs 3.38 billion, reports Economic Times. Praj Industries is engaged in bio-processing and engineering. Praj earns around 85% of its revenue from distillery plants and equipment and waste water treatment systems. >The move hinted towards the Tatas` intention to enter the distillery and waste water treatment industry. Tata Sons bought 91.3 million shares at Rs 252 a share, which is at a 6% premium to Wednesday`s (Sep. 26, 2007) closing price of Rs 238 a share. Tata group intends to make profits out of the growing demand for ethanol and brewery technology. The promoters of Praj Industries, the Chaudhari family, hold 28.2% in the company wherein other prominent shareholders include large investors such as Vinod Khosla (8.8%) and Rakesh Jhunjhunwala (6%). Shares of the company were closed down Rs 10.2 , or 4.11%, at Rs 238.05. The total volume of shares traded at the BSE was 15,394,670.(Wednesday).
The move by Tata Sons is significant as the group`s current shareholding is just below the SEBI-stipulated trigger for an open offer.
According to capital market norms, if a company acquires 15% of the stock in another company, then the acquirer has to make an open offer to retail shareholders to buy at least 20% of the target company.
It will bring a major change in the shareholding pattern of the Pune-based Praj.
