Serial entrepreneur and ace investor C Sivasankaran is at it again. This time he is betting on Sujana Towers a company that is engaged in manufacturing telecom and power towers and gels with Siva Group’s privately-held entity Siva Projects Engineering and Enterprises Limited (SPEEL).
SPEEL acquired 1.5% in Sujana Towers for around Rs 19.23 crore($4.2 million) on Tuesday. SPEEL is engaged in developing passive infrastructure for mobile communication towers and related services including operations & maintenance for tower operators.
Sujana Towers’ scrip that rocketed over five times since January to hit a high of Rs 230 last month has since then crashed over 40%. SPEEL picked the shares at Rs 137.4 per share on Tuesday. The company is in the process of splitting its stock of face value Rs 5 to Re 1 each and has also announced plans to raise $100 million through various options.
The promoters hold around 38% of the company, a quarter of which is pledged. Although this leaves a scope for a hostile takeover the promoters have been converting warrants issued by the company in December last year into shares which provides them a cushion against a sudden takeover move.
The promoters holding has moved up from 33% as of December’09 to 38% and they have converted some more warrants into equity recently which will push their holding and dilute the equity percentage bought by SPEEL. Having said that Siva Group could just be looking at a portfolio investment in Sujana Towers.
Siva Group had been active in picking stake in small and mid-sized companies in diverse sectors in the recent past. The group had picked over 13% stake in Chennai-based realty company Arihant Foundations and Housing in June and this year also acquired a small stake in Karuturi Global over the last one month. This supplements its recent investments in agri-related firms Ruchi Soya and KS Oils early this year.