MUMBAI: Subhash Chandra-promoted Essel Group has acquired 10.2% in Hyderabad-headquartered IVRCL setting the stage for a possible take-over battle. The Essel Group, which acquired 10.2% through secondary market transactions, said it was keen to increasing its stake.
IVRCL Group`s chief financial officer Balaram Reddy told ET that the company had not received any communication from the Essel Group. IVRCL officials said that chairman and managing director Sudhir Reddy was travelling abroad and has been informed about the block deals.
Entities owned by Reddy together hold 11.2% stake in IVRCL, making the company a potential target for a hostile acquisition.
"In line with its philosophy to grow its infrastructure business to match and benefit from the rising proportion of infrastructure investment by India, the Essel Group has acquired a 10.19% stake in IVRCL and is keen to increase it and is in the process of increasing it," it said in a statement late on Tuesday.
The equity market was abuzz with speculation that Essel Group`s flagship infrastructure company Essel Infraprojects has been acquiring shares of IVRCL through block deals.
Essel, which made the announcement late evening, did not reveal the acquisition cost for the stake but the current market capitalisation of IVRCL stands at 1,612 crore, making the stake worth around 160 crore.
"The Essel Group sees exciting business possibilities to expand its infrastructure portfolio through this investment," Essel Group said. It also said that neither Zee Entertainment Enterprises nor any other
media entity of the Essel Group had participated in the investment. Essel Infraprojects is currently executing road, urban infrastructure, power, water and solid waste water projects. Its infrastructure business order book is worth 27,000 crore. The company currently has six operational projects and a consolidated turnover of 1,250 crore.
IVRCL Group`s chief financial officer Balaram Reddy told ET that the company had not received any communication from the Essel Group. IVRCL officials said that chairman and managing director Sudhir Reddy was travelling abroad and has been informed about the block deals.
Entities owned by Reddy together hold 11.2% stake in IVRCL, making the company a potential target for a hostile acquisition.
"In line with its philosophy to grow its infrastructure business to match and benefit from the rising proportion of infrastructure investment by India, the Essel Group has acquired a 10.19% stake in IVRCL and is keen to increase it and is in the process of increasing it," it said in a statement late on Tuesday.
The equity market was abuzz with speculation that Essel Group`s flagship infrastructure company Essel Infraprojects has been acquiring shares of IVRCL through block deals.
Essel, which made the announcement late evening, did not reveal the acquisition cost for the stake but the current market capitalisation of IVRCL stands at 1,612 crore, making the stake worth around 160 crore.
"The Essel Group sees exciting business possibilities to expand its infrastructure portfolio through this investment," Essel Group said. It also said that neither Zee Entertainment Enterprises nor any other
media entity of the Essel Group had participated in the investment. Essel Infraprojects is currently executing road, urban infrastructure, power, water and solid waste water projects. Its infrastructure business order book is worth 27,000 crore. The company currently has six operational projects and a consolidated turnover of 1,250 crore.
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