The selling pressure might have been triggered by investors whose shares may have not been accepted in the offer, said an analyst with a leading foreign brokerage. An analyst with a leading domestic brokerage said the acceptance ratio in the open offer is at 56%.
Barring Thursdays battering, the scrip had gained 9.74% since April 15, 2014, when the open offer was announced. On Thursday, the scrip fell 9.3% intraday. In YTD, the scrip stayed flat, with negative returns of 0.68%. Diageo had made an open offer to public shareholders of United Spirits to acquire an additional 26% stake in the company at Rs 3,030 per share. The offer was open from June 6 to June 19.
Certain experts attribute the fall in the shares to short positions taken by traders in next months series. Traders who were looking for arbitrage opportunities in the open offer have taken short positions in the July series for hedging purpose, said Rikesh Parikh, vice-president, Motilal Oswal Financial Services.
The counter has seen heavy volumes since the announcement of the open offer. The average daily volumes (NSE and BSE) since April 15 have been at 16.75 lakh shares, more than double the average daily volumes seen during the year at 7.5 lakh shares.
Experts say the open offer is unlikely to see a full acceptance. We do not expect a full acceptance for the offer and believe longer term investors will wait for the premiumisation theme to play out in USL over the next 18-24 months, said IDFC Institutional Securities in a recent note. The market seems to be implying an acceptance ratio in excess of 70% considering the current spread between the estimated fair price and the current market price, Kotak Institutional Equities added.
The tendering period for the open offer began on June 6. The London-based liquor giant Diageo would see its stake rise to 54.78% from 28.78% stake if the open offer is successful.
Experts feel the scrip is likely to see further correction after the open offer. We expect the stock to trade on fundamentals, once the offer trigger is over and reset our post-offer target price to R2,500, CLSA said in a note. Our post-open offer price stands at R2,300, Motilal Oswal Financial Services added.