The German promoter group of Micro Inks Ltd, which was acquired in 2005, is making an offer to delist the company. The Huber Group, through its holding company MHM Holding GmbH, has made the offer to acquire the public shareholding of Micro Inks. The promoter group currently holds around 75% stake in the company while the rest is held by the public and mutual funds. At an offer price of Rs 550 per share, MHM holding could be shelling out around Rs 340 crore for the issue.
Currently, the shares of Micro Inks are trading at Rs 626 at 11.30 AM today, down by 1.2%. The shares of the company rose sharply from the Rs 487 level to the current price after the news of delisting first came out in December this year.
The Huber group, one of the largest ink makers in the world, picked up the promoter Bilakhia family’s 59% stake in Micro Inks for Rs 991.5 crore in 2005. The privately-held German firm subsequently came out with an open offer, increasing its stake to 70.5%. The original promoter family still holds a 4.5% stake through Bilakhia Holdings. The Vapi, Gujarat-based Bilakhia family has interests in areas like agro-chemicals, life sciences and education.
Major institutional shareholders of Micro Inks are two mutual funds – Reliance Equity Opportunities Fund and HDFC Mid Cap Opportunities Fund – who hold a 7.2% and a 3.7% stake, respectively. The promoter group of Micro Inks plans to go for a voluntary delisting when its shareholding reaches over 90%. The issue is being managed by Kotak Mahindra Capital Company.
Micro Inks reported revenues of Rs 1,612 crore and a net profit of Rs 33 crore for FY09.
The delisting is likely to give more operational flexibility to Huber Group. The key reason for corporates going public is to raise funds but given the parents backing, Micro Inks doesn’t require to raise funds in India.
The delisting comes at an interesting time when capital markets have swung back in recovery. A number of multinationals with listed Indian units made delisting offers around 8-9 months back when the markets had hit a bottom. These companies included South Korean confectionery maker Lotte India, drug maker Novartis, Mylan owned Matrix Labs.