Essel Group says no plans to buy more IVRCL shares

Subhash Chandra-led Essel Group has said it has no immediate plans to buy additional shares of IVRCL Ltd, where it recently bought 12.27 per cent, as the promoters of the infrastructure company are not willing to sell their holding.

With 12.27 per cent stake, the Essel Group has already overtaken the 11.18 per cent shares held by the promoters - led by Sudhir Reddy - triggering speculations that IVRCL could become a takeover target.

Essel said that it would remain invested with its current holding of 12.27 per cent until the general shareholder consensus or other considerations persuade Essel to intervene in the management of IVRCL.

Disclosing that it was approached for stake purchase in IVRCL a few months back, Essel said it "is disappointed to now learn from the investment bank that IVRCL's promoters are neither interested in selling their stake nor willing to partner with Essel as strategic investors to become a partner with the existing management in IVRCL".


Stating that it first got interested in the Hyderabad-based firm after being approached by IVRCL's investment bankers, Essel Group said in a statement on Monday the price sought for promoters' 11.2 per cent stake was "manifold above the then prevailing market price".

Subsequently, Essel Group decided to acquire the stake from the open market, it said, adding that it has been in constant dialogue since then with the investment banker appointed by IVRCL promoters.

However, the promoters are now neither interested in selling their stake, nor willing to partner Essel as strategic investors in running the company, said the Essel Group, which has established a sizeable presence in infrastructure space.

Hence, the Group has decided to stay invested in IVRCL, but "at present, there is no intent of Essel to increase stake in the Company (IVRCL) by way of an open offer or through the open market," it added.

Essel Group said that it wanted to put to rest "any false and misleading rumours that Essel may make an open offer or otherwise buy additional stake in the company."

Shares of IVRCL dropped nearly 5 per cent to Rs 69.10 in early afternoon trade at the Bombay Stock Exchange. The stock has gained considerably ever since Essel Group's stake purchase became public on expectations about a possible takeover bid.

Essel Group is present in infrastructure business through its company, Essel Infraprojects Ltd, which recently acquired majority stake in a Maharashtra based infrastructure company with a substantial order book.

With PTI inputs