Essar Group companies touch 52-week highs on delisting talk

Written by fe Bureau | Mumbai | Updated: May 22 2014, 16:07pm hrs
Essar Group companies surged 15-16% to their 52-week highs on Wednesday following reports that the Indian multinational conglomerate with operations in steel, shipping and ports is considering de-listing all its publicly traded units as well as planning to sell some of its assets.

On Wednesday, the Essar Oil scrip gained 15.34% to end at R89.50, Essar Ports rose 16.75% to close at R88.50, while Essar Shipping ended at R22.60 or 15.60% higher. In comparison, the BSE Sensex ended 78.86 points or 0.32% lower at 24,298.02.

According to reports, the Essar Group wants to take its companies private as it considers them undervalued. At the current market price, the Essar Shipping scrip is more than 34% below its all-time high touched in 2012.

Essar Oil is trading 74.23% below its all-time highs, while Essar Ports is trading 68% below its all-time highs.

Essar Oil recorded the highest combined (BSE and NSE) volumes in more than two years as a total of 1.95 lakh shares exchanged hands on Wednesday.

Essar Ports saw the highest volumes in more than a year at 16 lakh shares, while Essar Shipping saw a total 25 lakh shares traded on both the exchanges.

In year to date, Essar stocks have been outperforming with Essar Oil gaining more than 64%. Essar Shipping and Essar Ports have gained 11.06% and 43.32%, respectively.

At the current market prices, the promoters would have to shell out a total of R2,291 crore to delist the companies. The total debt on the books of Essar Ports at the end of FY14 is R5,534.36 crore. The debt on the books of Essar Shipping is R4,594.86 crore, while Essar Oil has a debt of R21,042 crore.

All three companies on Wednesday clarified that they have not received any communication from their promoters on delisting. Meanwhile, the group which is controlled by Ruia brothers Shashikant and Ravikant, is already in the process of de-listing Essar Energy from the London Stock Exchange. The Essar Energy scrip was trading at 69.75 pence, up 0.36% from the previous close.