Institutions upset with KOEL stake sale plan

Institutional investors are miffed with the announcement by Kirloskar Oil Engines (KOEL) to sell its shareholdings in its six joint ventures to a group company, Kirloskar Systems for Rs 250 crore. They feel the share sale is happening at a price that is just above the book value of the holdings.

A fund manager, who did not wish to be named, said KOEL is getting slightly more than what it had paid to buy these stakes some years back. Fund managers said the stake sale to a group company at this price is against the interest of public shareholders, as the total value of all the holdings is ���significantly higher��� . Grapevine has it that a foreign hedge fund is planning to write to Kirloskar Oil indicating its readiness to buy the stakes for around Rs 300 crore.

On Thursday, the stock rose 5.7% to Rs 142.45. The company will sell its stakes in Toyota Kirloskar Motor, Toyota Kirloskar Auto Parts, TG Kirloskar Automotive, Toyota Tsusho India, Kirloskar Toyoda Textile Machinery and Denso Kirloskar Industries.