Tag: public shareholders

Reliance Capital’s public shareholders to take big hit; Anil Ambani barely hurt

Banking & Finance

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Public shareholders of Reliance Capital, holding over 97 per cent in the company, will take a major hit with the RBI superseding the NBFC’s board even as the ousted promoter-Chairman, Anil Ambani, walks away, barely bruised, as he had reduced his stake to less than 2 per cent by March 2020 from over 52 per cent in December 2018.

Even as the promoters were selling the shares, retail investors were lapping them up. Data with BSE show that the promoter group, led by Anil Ambani and his family, owns just 1.51 per cent stake as on September 30, 2021, while public shareholders held 97.85 per cent. Retail shareholders with a share capital of up to ₹2 lakh hold as much as 57.53 per cent.

 

 

Promoter stake cut, red flag

Foreign portfolio investors, who held as much as 22.74 per cent as on June 30, 2019, owned just 0.43 per cent by September 30, 2021. JN Gupta, Managing Director, Stakeholder Empowerment Services, said: “Past failures such as those at YES Bank and DHFL indicate that rarely a company with high promoter stake fails… The first red flag is when the promoter stake begins to come down. This should be a trigger for the RBI to sit up and take action, rather than wait till the company completely fails.”

LIC, with a stake of 2.98 per cent, is the single largest shareholder of Reliance Capital. Ramkrishna Reddy Chinta is another large shareholder (2.16 per cent), with his RKR Investments Services Private Limited holding a further 1.43 per cent. The RBI must re-look ownership norms, setting also a minimum threshold, Gupta said.

 

Advisory panel

Simultaneously, the RBI has constituted a three-member Advisory Committee to assist the Administrator of Reliance Capital. The members are Sanjeev Nautiyal, former Deputy Managing Director, SBI; Srinivasan Varadarajan, former Deputy Managing Director, Axis Bank; and Praveen P Kadle, former MD and CEO, Tata Capital.

 

RBI supersedes the board of Anil Ambani’s Reliance Capital

 

Reliance Capital shareholding      
       
  Promoter % Public % FPI %
Jun 30- 2018 52.23 47.14 17.13
Sept 30-2018 52.24 47.12 19.64
Dec 31-2018 52.24 47.12 16.5
March 31-2019 47.48 51.88 24.35
Jun 30- 2019 41.71 57.66 22.74
Sept 30-2019 40.41 58.95 13.67
Dec 31-2019 33.51 65.85 5.16
March 31-2020 1.51 97.85 0.24
Jun 30- 2020 1.51 97.85 0.42
Sept 30-2020 1.51 97.85 0.41
Dec 31-2020 1.51 97.85 0.39
March 31-2021 1.51 97.85 0.42
Jun 30- 2021 1.51 97.85 0.44
Sept 30-2021 1.51 97.85 0.

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Allcargo retreats from delisting plan as public shareholders vote against the offer

Banking & Finance

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Allcargo Logistics has dropped plans to delist the company after public shareholders voted against the offer to take the company private.

The firm led by Shashi Kiran Shetty said it will continue to drive its ambitious growth plans as a listed entity, multiple sources briefed on the plan said.

This comes against the backdrop of a strong economic revival and significant growth in the logistics sector over the last one year.

“We respect the decision by the shareholders. A lot has changed in the last 12 months, since we launched the delisting offer. The primary purpose of delisting was to facilitate growth of various businesses. It would have been challenging to raise funds for growth one year ago, without restructuring and going private. However, in the current environment, we are confident of driving the company’s growth as a listed entity,” company sources said.

“Allcargo will explore the right steps forward to pursue its growth ambitions so that all stakeholders will benefit from it. We don’t have any plans to reinitiate the process for delisting any of our listed entities,” the source said, asking not to be named.

Strong performance

The process for delisting was announced in August 2020 after the pandemic hit the entire economy and the promoters felt the need to restructure and infuse funds for its growth and investment plans. After changes in regulations, shareholder approval had to be re-initiated and the promoters sought the approval post getting the nod from the board.

“All businesses in the group are now undergoing a holistic transformation, with focus on asset-light model and increased stress on digitalisation. The improved performance, driven by strong management across the board, has helped the company efficiently manage its working capital challenges during the crisis period, as well as the funds for acquisitions. The company continues to demonstrate strong performance,” he added.

Allcargo informed the BSE on Monday that the special resolution for delisting its shares was not passed by public shareholders with the requisite majority till September 10, the last date set for remote e-voting.

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