MUMBAI: Tractor-maker Escorts said that shareholder Kubota’s off-market open offer saw investors tendering 5.19 crore shares against the offer size of 3.74 crore shares, implying an acceptance ratio of 72%. Analysts expect the stock to correct when the market opens Tuesday. The offer is worth almost Rs 7,500 crore.
“The stock could correct at least to the level where the active futures contract closed at on Monday,” said Rajesh Palviya, derivatives head at Axis Securities. Investors had purchased the shares in the cash market and sold the futures contract in the run up to the tendering period from March 14-28.
The futures contract was sold to prevent a loss on the cash market in case the acceptance ratio was lower than expected. The March 31 expiry futures contract closed at Rs 1632.8 a share against the Rs 1698.75 that the cash market share closed at. Escorts’ board had on November 18 last year announced that Kubota would acquire 3,74,91,556 or 28.42% additional shares through preferential allotment plus open offer at a price of Rs 2,000 per share.
Kubota is a Japanese agri-machinery and construction equipment major which currently which owns 9.09% stake in Escorts, cites icicidirect.com. Kubota, it said, is expected to increase its holding to 53.5% through a preferential issue of equity, open offer and equity reduction.