Marg’s shareholders protest company’s QIP plan

MUMBAI: Shareholders of Chennai-based Marg have complained to Sebi about the company’s move to raise Rs 500 crore through a qualified institutional placement, or QIP, on concerns that the consequent equity dilution could reduce the number of shares that the acquirer accepts from non-promoter shareholders during a voluntary open offer that has been pending regulatory approval for a year.

These shareholders feel any equity fund raising will result in equity dilution, which could possibly tweak the acceptance ratio — the ratio of number of shares tendered to those accepted. Responding to an ET query, Marg said that funds from the proposed QIP would be beneficial to all the shareholders.

“The company’s operations cannot come to a standstill if an open offer from one of its promoters is awaiting a final nod from the regulator. There is absolutely nothing wrong with making an institutional placement in consonance with all relevant and applicable legal requirements.”

Marg promoters had announced a voluntary open offer in October last year and filed the documents with Sebi for its approval a month later. Motilal Oswal Investment Advisors is the manager to the open offer. According to Sebi’s website, the proposal is still under process and the regulator is probing the past violations in the purchase of shares by the promoters.

However, even after a year, it has neither directed the promoters of Marg to announce a mandatory open offer nor approved the voluntary open offer proposed by the promoters at Rs 91 per share. Sebi did not respond to ET queries on the subject. Promoters of the company are under the scanner of Sebi, which is probing whether promoters violated the takeover code by purchasing shares in excess of the 5% limit every year.

Marg added that if an open offer is held up, the rest of the operations of the company, including the infusion of equity through other legally permissible means, cannot be held up. “Past violations on the part of the company or its promoters are not true and are strongly denied. We have furnished all information sought by Sebi and cannot comment at this stage as the matter is pending,” it added.