Market regulator Securities and Exchange Board of India (Sebi) has cleared the indirect acquisition of Shriram Properties by the company’s Chairman and Managing Director Murali Malayappan.
Malayappan owns 0.08% of smallcap company Shriram Properties, whose market capitalisation is at Rs 1,874 crore.
Among other shareholders are Shriram Group Executives WelfareTrust (SGEWT) which has a 0.14% stake and Shriram Properties Holdings Private Limited (SPHPL) which holds 27.72%. The public shareholding stands at 72.06%.
According to the exemption order issued by Sebi on Monday, the indirect acquisition would not cause any change in control of Shriram Properties and following the acquisition, the promoter and promoter group would continue to hold 27.94% of the company.
The CMD made an application to acquire 13,38,335 equity shares of SPHPL from Shriram Group Executives Welfare Trust (SGEWT), which represents 70.86% of the share capital of SPHPL, at an indicative price of Rs 900 per share. SGEWT is a shareholder in SPHPL. Malayappan has applied for an exemption from the open offer clause under the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations or SAST Regulations.
Malayappan currently holds 20% per cent of SPHPL and following the acquisition, he will hold 91.19%.
The Sebi order noted, “The proposed indirect acquisition would not affect or prejudice the interests of the public shareholders of the Target Company in any manner.”
“There will be no change in control of the Target Company pursuant to the proposed acquisition,” the order said further.
The Takeover Panel had recommended that an exemption be granted to the proposed acquirer in this instance.
In the order, SEBI’s whole-time member Ashwani Bhatia wrote, “I, in exercise of the powers conferred upon me under Section 19 read with Section 11(1) and Section 11(2)(h) of the SEBI Act, 1992 and regulation 11(5) of the Takeover Regulations, 2011, hereby grant exemption to the Proposed Acquirer, viz., Mr. Murali Malayappan from complying with the requirements of regulations 3(1), 4 and 5(1) of the Takeover Regulations, 2011 with respect to the proposed indirect acquisition in the Target Company, viz., Shriram Properties Limited, by way of the proposed transaction as mentioned in the Application.”
Shares of Shriram Properties on Monday ended at Rs 110 on the NSE, gaining by Rs 2.59 or 2.41% over Friday’s closing price.
