Foseco India Ltd. and Bombay Rayon Fashions Ltd. (BRFL) are among 29 Indian companies that need to sell 25 billion rupees ($442 million) of shares before a deadline to meet the minimum public holding rule expires in two days.
Company founders must trim their stakes to 75 percent by June 3 to ensure a public float of least 25 percent or face “severe consequences,” U.K. Sinha, chairman of the Securities and Exchange Board of India, said May 20.
The last-minute rush to meet the government rule announced in June 2010 has led to equity sales of about $1 billion this month from at least 22 firms including DLF Ltd., the largest developer, and JSW Energy Ltd. (JSW), owned by the billionaire Jindal family, data compiled by Bloomberg show. With the offers set to end next week, foreign flows to the stock market may increase, helping the S&P BSE Sensex (SENSEX) extend the best gain this year in the group of emerging-market nations known as the BRICs.
“The market has held up pretty well so far despite having to absorb this paper as foreign funds have committed $2 billion -to-$3 billion” to the sales, Taher Badshah, senior vice president and co-head equities at Motilal Oswal AMC Ltd., which manages about $300 million in assets, said by phone yesterday. “Funds would be freed up after this offer-related over-hang is gone.”
Overseas funds have bought a net $14.9 billion of Indian shares in 2013, a record for the period and the second-largest among 10 Asian markets tracked by Bloomberg, behind Japan. The Sensex has risen 4.1 percent this year, climbing to its highest level in more than two years on May 17. The Ibovespa, Brazil’s main equity gauge, has slid 10.4 percent in 2013, while Russia’s Micex Index has lost 7.7 percent. China’s Shanghai Composite Index has risen 2.1 percent so far this year.

Jet, Novartis

Jet Airways (India) Ltd. (JETIN), the nation’s largest publicly traded carrier, received bids for 2.99 million shares versus 4.3 million offered, according to an exchange filing yesterday. The stock declined 1.6 percent to 528.45 rupees. Jet had set a floor price of 510 rupees apeice for the sale that will cause the founder holding to shrink from about 80 percent.
Jet was one among nine companies, including Novartis India Ltd. (HCBA), that sold shares yesterday. Novartis sold 454,205 shares at a floor price of 375 rupees apiece, according to a filing to pare the parent’s stake from 76.42 percent.
Sun TV Network Ltd.’s (SUNTV) offer to sell 7.88 million shares was fully subscribed, according to a May 29 filing. The shares fell 1.7 percent to 421.05 rupees yesterday, compared with the floor price of 403 rupees each set for the sale. Billionaire founder Kalanithi Maran’s stake will fall from 77 percent.