Mumbai, Mar 9: With the primary market in the doldrums, share registrars are looking at mergers and acquisitions (M&As) to provide succour and keep the cash registers ringing.Registrars are going in for specialised services in this field with each of them setting up a separate department and recruit people who are qualified to handle such services. In many cases, registrars handling open offers are not associated with either the target company or the acquirer. They, therefore, market themselves to the issue manager to offer their services.
They are also promising quick services like 15 days or T+5 period (concluding the payment within five days of receipt of the application for the offer) to complete these offers. As per Sebi regulations, registrars have to conclude the entire offer, including reimbursing the investors, within 30 days of the commencement of the open offer.
The country's leading registrar, Karvy Consultants, has already handled six such open offers and filed papers for the on-goingSterlite offer. Some of the open offers handled by Karvy include those made by Fuller International Inc, Remy India Holding Inc, Akar Laminator and Piramal Group. Karvy is also trying to cash in on its category-I merchant banker status.
MCS Ltd, a close second to Karvy in terms of business volumes, is also targeting open offers. It has handled offers of British Gas, which took over Gujarat Gas, Torrent Gujarat taking over Ahmedabad Electricity and Sandvik Asia International increasing its stake in its Indian arm.
Hostile takeovers have particularly thrown up a challenge for registrars. Till date, most of the takeovers have been on the basis of negotiated deals, and in these cases, the data which includes the shareholding pattern of the target company is readily available with the registrars handling the open offers. This may not be possible in the case of hostile takeovers where the target company would not be ready to part with the database which would make things quite difficult for the registrars. Theregistrar handling the open offer will be sending the shares for signature verification to the share and transfer agents of the target company after processing the applications, say registrar sources.
Processing offers generally warrants expertise in the handling of both initial public offers and rights issue. The registrars would be handling the applications for the open offer as they handle any new public issue while the offer is open only to the existing shareholders of the company which is similar to a rights issue. Registrars handling M&As also have to specifically take care of street name shares which are handled separately. These shares should be accompanied by proper contract notes and they have to be careful on what basis they reject such applications.
