SEBI has approved Murali Malayappan, CMD of Shriram Properties, to indirectly acquire a 70.86% stake in Shriram Properties Holdings Pvt. Ltd. (SPHPL), raising his holding in SPHPL from 20% to 91.19%. Currently, Malayappan holds 0.08% in Shriram Properties, while SPHPL owns 27.72% of the small-cap firm with a market cap of INR 1,874 crore. SEBI exempted the acquisition from open offer requirements, as it does not change the company's control or affect public shareholders. Post-approval, Shriram Properties' shares rose 2.41% to close at INR 110 on the NSE.
The Securities and Exchange Board of India (SEBI) has granted approval for Murali Malayappan, Chairman and Managing Director of Shriram Properties, to indirectly acquire a significant stake in the company. Malayappan currently holds a small 0.08% stake in the small-cap company, whose market capitalization stands at INR 1,874 crore.
Other key stakeholders include the Shriram Group Executives Welfare Trust (SGEWT), which holds 0.14% of the company, and Shriram Properties Holdings Private Limited (SPHPL), with a 27.72% stake. The remaining 72.06% of shares are held by the public. According to SEBI's exemption order earlier this week, the indirect acquisition is not expected to result in any change in the control of Shriram Properties, and the promoter group will retain a combined holding of 27.94% post-acquisition.
Malayappan has applied for an exemption from the open offer requirements under the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations (SAST). He seeks to acquire 13,38,335 equity shares of SPHPL from the Shriram Group Executives Welfare Trust, representing 70.86% of SPHPL's capital, at an indicative price of INR 900 per share. Currently, Malayappan holds 20% of SPHPL, and following the proposed acquisition, his stake will rise to 91.19%.
SEBI's order confirmed that the proposed acquisition would not negatively affect or prejudge the interests of the public shareholders of Shriram Properties. The regulator further clarified that there will be no change in control of the company as a result of the acquisition. The Takeover Panel had recommended granting an exemption in this case. Following the announcement, Shriram Properties' shares closed at INR 110 on the NSE, up by INR 2.59, or 2.41%, from the previous session's closing price.
In conclusion, the approval from SEBI allows Murali Malayappan to strengthen his position in Shriram Properties, marking a significant move for the company. The exemption from the open offer requirements ensures smooth progress for the acquisition, which is set to have no adverse effect on the interests of public shareholders.
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