Mumbai: There are presently no bidders for the scam-tainted ACC shares of Harshad Mehta as the two possible buyers, financial institutions and Gujarat Ambuja Cements Ltd (GACL), have decided not to bid for the same.
The shares, which represent around 12 per cent equity capital of ACC, have been put for auction and the bids are likely to open soon.
GACL, with a 14.45 per cent stake in ACC, has already said that it will not buy the Mehta shares because it will trigger the Securities and Exchange Board of India takeover code regulations.
GACL could be in trouble as the group's holding in the company will then breach the threshold of 15 per cent due to the reduction in the capital base. Recently, the promoters of Apollo Tyres had a similar experience.
Life Insurance Corporation of India, which has been acquiring Mehta's shares from auctions, has also decided against picking up the ACC block due to its over exposure in the cement scrips.
"LIC has enough cement stocks in the portfolio with holdings in Larsen & Toubro and ACC. Each time the prices of the cement scrips go down the corporation gets affected," says a senior LIC official. LIC has an 18.6 per cent stake in L&T and a 15.69 per cent stake in ACC. Foreign financial institutions together control a 26 per cent stake in ACC.
Unit Trust of India (UTI), which has around 1.65 per cent in ACC, is also not keen on picking up any more shares because of redemption pressure and the absence of big inflows. UTI officials say the trust is also not interested because the benami shares have given it a bad time.
L&T has already shelved its acquisition plans in the cement sector. The other contender, Lafarge India, too is believed to have stayed away from the bid as it is consolidating its position in other countries.
According to market sources, one possibility of disposing of these shares could be selling it in small lots or in the open market as per a Supreme Court directive. The apex court had, while specifying the methods of sale, said that if the shares could not be sold as a controlling block, then they could go in for smaller lots. If that too is not possible, they could be sold in the open market.