C Siva-sankaran-led Siva Group has increased its stake in Indore-based vegetable oil company Ruchi Soya Industries Ltd to 12%. Prior to the move, Siva Group, formerly known as Sterling Group, was holding less than 10% stake in the solvent extraction company. The Chennai-based group started mopping up Ruchi stocks since January 2010.
By hiking its stake to 12%, the Siva Group is just 3% away from triggering the mandatory take-over code as stipulated by the market regulator, Securities and Exchange Board of India (Sebi). As per the current norms, the open offer clause is triggered automatically if a company buys 15% or more stakes in a company. As on March 22, Siva Group entities were holding 2.90 crore shares, 12% voting stock in Ruchi Soya, up from 2.4 crore shares aggregating to 9.93%. Siva has lapped up Ruchi shares through four of its investment vehicles?VS Net Ltd, Baghmar Finlease Ltd, Aiwo Ltd and Ratha Infrastructure Pvt Ltd.
According to analysts, the move makes sense as the sector is growing with violent swings in commodity cycles sending the food inflation soaring.
C Sivasankaran had bought a majority stake in the Tamilnad Mercantile Bank, which he later sold to the Ruias of Essar group making profit.