India arms of MNCs rally on open offer talk

Investors were seen flocking to the counters of Indian subsidiaries of multinational companies on hopes of open offers. Shares of select MNCs like Fairfield Atlas, Novartis, BASF India and Foseco India gained sharply on Monday on talks that their foreign parents may make attempts to buyout the minority shareholders at some premium to the market price.

They own significantly large stakes --between 70% and 85% -- in these companies. With the government mandating minimum public shareholding of 25% in all listed companies, many MNCs are expected to make serious efforts to delist from the bourses by acquiring shares from the public.

Fairfield Atlas hit the 20% upper circuit at Rs 81.7, while Novartis rose 12% to Rs 848 on the BSE. BASF and Foseco gained 8.3% and 7.3% respective in a flat market on Monday. The possibility of open offer could not be confirmed with the respective companies.

(Contributed by Apurv Gupta & Vijay Gurav)