Frontier Warehousing Limited has announced a mandatory open offer to acquire up to a 26% stake in Kesoram Industries at ₹5.48 per share, amounting to a total potential outlay of ₹442.26 crore. This development follows Frontier’s agreement to purchase a 42.80% stake from the Kesoram promoter group at ₹4 per share.
The transaction is expected to significantly reshape the ownership structure of Kesoram Industries.
Key Details of the Open Offer
| Aspect | Details |
| Acquirer | Frontier Warehousing Limited |
| Target Company | Kesoram Industries Limited |
| Offer Size | Up to 8.07 crore equity shares (26% of voting capital) |
| Offer Price | ₹5.48 per share |
| Total Consideration | ₹442.26 crore |
Background of the Acquisition
Frontier Warehousing recently entered into a definitive agreement to acquire a 42.80% stake from Kesoram’s promoter entities, including Manav Investment and Trading Co. Ltd. and Pilani Investment and Industries Corporation Ltd. The agreed purchase price of ₹4 per share is lower than the open offer price, as required under SEBI takeover regulations.
Potential Impact on Kesoram Industries
The open offer may lead to a major shift in control and governance at Kesoram Industries, which has interests spanning cement and rayon manufacturing. The company has undergone significant financial restructuring during the past year.
Financial Snapshot of Kesoram Industries
| Metric | Current Year | Previous Year | Change |
| Total Assets | ₹812.50 crore | ₹3,376.10 crore | -75.93% |
| Total Equity | ₹451.50 crore | ₹94.80 crore | +376.27% |
| Current Assets | ₹138.70 crore | ₹1,143.60 crore | -87.87% |
| Current Liabilities | ₹205.20 crore | ₹1,058.00 crore | -80.60% |
These figures reflect substantial deleveraging and restructuring efforts, resulting in lower liabilities and improved equity levels.
Summary
- Frontier Warehousing has launched a mandatory open offer to acquire a 26% stake in Kesoram Industries at ₹5.48 per share.
- The open offer follows a prior agreement to purchase a 42.80% promoter stake at ₹4 per share.
- The transaction may significantly alter the company’s shareholding and control.
- Kesoram’s financial statements indicate major restructuring over the past year, with a sharp decline in assets and liabilities and a substantial increase in equity.
Disclaimer:
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