The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.


All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.

Hostile predator prowls the subcontinent

A wakeup call is hardly ever welcome. Core shareholders of Indian companies are being jolted awake by a hostile predator, a rare event in corporate India. In October, Renaissance Estates, a Delhi-based company owned by Abhishek Dalmia, made an open offer to buy Gesco, a property company owned by the Sheths, a prominent industrialist family with interests in the shipping business. Dalmia had bought up just over 10% of Gesco's shares in the market, and bid for another 45% to gain control from the Sheths who own around 13%.

Dalmia's move was well timed. Gesco was demerged from the Sheths' family businesses early this year. Minority shareholders were hardly rewarded as Gesco's shares traded at around Rs10 ($0.21), around a fifth of their book value. Dalmia offered them Rs27 for each share. At that price, Dalmia would have to fork out Rs300 million to gain control of Gesco.

His pay-off? Gesco owned valuable property worth Rs1.2 billion and had Rs300 million in cash. Says TV Raghunath, vice president at Kotak Capital Company, who is advising the Sheths: "It [Gesco] is an asset stripper's dream."

In November the Sheths made a counter-offer to buy up 33% of Gesco's shares at a price of Rs36 along with the Mahindras, another prominent industrialist family that has a property business.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree