SEBI clears Sriram Properties CMD Murali Malayappan for indirect acquisition

Market regulator Securities and Exchange Board of India (SEBI) has approved the indirect acquisition of Sriram Properties by the company’s chairman and managing director Murali Malayappan.

Malayappan Smallcap Company holds 0.08% stake in Sriram Properties, which has a market capitalization of Rs. 1,874 crores.

Other shareholders include Shriram Group Executives Welfare Trust (SGEWT) which holds 0.14% and Shriram Properties Holdings Private Limited (SPHPL) which holds 27.72%. Public shareholding is 72.06%.

According to the exemption order issued by Sebi on Monday, the indirect acquisition will not result in any change in control of Sriram Properties and the promoter and promoter group will retain 27.94% stake in the company after the acquisition.

indirect acquisition

CMD applied to acquire 13,38,335 equity shares of SPHPL from Shriram Group Executives Welfare Trust (SGEWT), representing 70.86% of the share capital of SPHPL, at Rs. 900 at an indicative price of Rs. SGEWT is a shareholder in SPHPL. Malayappan has applied for exemption from open offer clause under SEBI (Substantial Acquisition of Shares and Takeovers) Regulations or SAST Regulations.

Malayappan currently holds 20% stake in SPHPL and after the acquisition, it will hold 91.19% stake.

“The proposed indirect acquisition will not in any way affect or prejudice the interests of the public shareholders of the target company,” the Sebi order noted.

“There will be no change in control of the target company pursuant to the proposed acquisition,” the order further said.

The Takeover Panel recommended that the proposed acquirer be exempted in this case.

In the order, Sebi Whole Time Member Ashwani Bhatia wrote, “I, in exercise of the powers conferred on me under Section 19 read with Section 11(1) and Section 11(2)(h) of the SEBI Act, 1992 and Regulation 11 of the Takeover Regulations, 2011 (5), hereby exempt the proposed acquirer, in respect of the proposed indirect acquisition of the target company, Shriram Properties Limited, by the proposed transaction mentioned in the application.”

Shares of Sriram Properties on NSE on Monday traded at Rs. 110, up from Friday’s closing price of Rs. 2.59 or 2.41% up to Rs.

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