Raunaq group picks up 65.94 lakh shares of Harshad Mehta

Mumbai: The Raunaq group, promoters of Apollo Tyres, has picked up 65.94 lakh shares from the late Harshad Mehta's lot of shares for Rs 38.8 crore from the special court.

They aggregate to about 17 per cent of the company's equity capital. The promoters' holding will now go up to around 53 per cent. However, the company, when contacted, declined to comment on this development.

These shares, it is reliably learnt, were picked at a price of Rs 90 per share. On Wednesday, the Apollo Tyres scrip closed at Rs 180. The custodian, appointed under the Special Court Act 1992, had invited tender offers from interested parties to buy major chunks of these shares through an auction mechanism.

As of 30 December 2002, Apollo's promoters had a 36.97 per cent stake in Apollo Tyres. Financial institutions and banks hold a 24.44 per cent stake while the Indian public has 36.05 per cent holding in the company.

In September 2000, the special court judge, SH Kapadia, had specified the norms for the sale of a controlling block of shares by the custodian through the tender offer method, as they carry substantial voting rights and might lead to change in management control if the shares are picked up by persons other than the existing management, say sources close to the development.

The sources add that the acquisition of these shares is unlikely to trigger an open offer. The Securities and Exchange Board of India has already exempted the acquirer of shares from the custodian from making an open offer under the takeover regulations, in view of the unusual nature and the circumstances surrounding the case.

Last month, Life Insurance Corporation of India (LIC) had acquired 700,000 shares of Telco and 1.5 million shares of Larsen & Toubro from the custodian appointed by a special court. LIC picked up the L&T stock for Rs 175 a share and Telco at Rs 155. These deals were passed by the special court order recently.

The shares are part of the portfolio owned by Mehta, which were attached following the 1992 securities scam. They have since been put up for auction. LIC has been aggressively picking up the Big Bull's portfolio, which has an estimated market value of Rs 1,000-1,500 crore. LIC has picked up over Rs 300 crore of Mehta's stocks.