The open offer was made for 20 per cent stake in the Secunderabad-based cement company, and since the block equity-holders, including financial institutions, had already cashed out, the offer was primarily targeted at retail investors. Shareholders, with barely an 11 per cent holding, responded to the India Cements' open offer "Considering a floating stock of over 25 per cent, shareholders, who hold more than half of the total retail holding, chose to shun the offer even though the current market price is far lower," sources told The Financial Express. The Raasi stock, which closed at Rs 225 on Tuesday, shot up to Rs 239 on Wednesday at the Bombay Stock Exchange.

The shareholder response aggregating 11 percent of Raasi equity also includes 1,000 applications for 1.5 lakh shares, which are yet to be validated by the registrar. "Applications for transfer of 1.5 lakh shares, amounting to 2 per cent of the equity, are currently being scrutinised and a final certificate will be issued after it is established that they are valid," sources said.

It is learnt that even if the entire lot of transfer applications is found valid, the stake of India Cements in Raasi will increase to only around 83-84 per cent. This, in effect, will mean that the promoters of India Cements may avoid a full-buyback, which becomes mandatory under the Sebi guidelines if the promoter's shareholding crosses 90 per cent.

"Even as the offer price was very attractive, there are investors who are very possessive about their investments prefer to hold back their stakes instead," say market sources.

Even before its offer opened for public subscription, India Cements promoter N Srinivasan hiked his stake in the target company to around 77 percent, after the Rajus abruptly ended the takeover drama by selling out his entire 32 per cent holding to ICL. Financial institutions followed suit and struck a negotiated deal to sell off their 16 per cent holding in Raasi Cement. Earlier this month, India Cements took over management control of Raasi Cement and appointed N Srinivasan as the company's chairman and managing director. The erstwhile promoter BV Raju and four other directors representing the earlier management have resigned and India Cements- nominated five directors, including Srinivasan, have been included in the reconstituted board.