Essel Group has no plans to hike stake in IVRCL

Days after threatening to buy a controlling stake in IVRCL, Subhash Chandra-promoted Essel Group yesterday said that it does not have any intent to make an open offer to hike its stake in the Hyderabad-based infrastructure company.

However, the Mumbai-based group, which now holds a larger stake in IVRCL than its promoters, issued a veiled threat, saying that it would stay invested in IVRCL and keep an eagle eye on the recent announcement by IVRCL on selling some prime assets of the company.

IVRCL, which has debts of Rs4,500-crore, is keen to sell a few road projects to retire part of its debt.

"As a significant shareholder, Essel will keenly watch IVRCL's management and its performance. More specifically, it will critically evaluate the announcement made by the management in the media about its intent of selling some prime assets of the company, which may cause further deterioration in the overall asset base of the company, in which case Essel will weigh all available options including initiating relevant proceedings and other ways of protecting its interest," Essel said in a statement. 

Lat last month, Essel acquired a 10.19 per cent stake in IVRCL for about Rs60 crore and early this month, increased its stake by 2.08 per cent to 12.27 per cent.

Essel Group, which now holds 1.09 per cent stake more than the 11.2 per cent held by IVRCL's founder Sudhir Reddy, then threatened to acquire a controlling stake in the company either by way of an open offer or through the open market.