Plea to raise limit of creeping acquisition to 10 per cent
Mumbai: With massive fall in share price of individual companies in the current market meltdown, Sebi should allow promoters to acquire up to 10 per cent stake through creeping acquisition in a year, by relaxing the current 5 per cent limit, feel market analysts.
The shares of Mid-Cap and Small-Cap companies have seen huge price erosion in recent times and some of its has been due to heightened pessimism over economic slowdown rather than deterioration in fundamentals of the company.
Raamdeo Agrawal, MD and co-founder, Motilal Oswal Financial Services in a tweet on Thursday said, ' I have not seen wealth destruction like we have seen now in my 40 years in the market.'
Kishore P Ostwal, CMD, CNI Research, engaged in Small and Mid-Cap stocks research said, 'Sebi has raised open offer limit from 15 per cent to 25 per cent for a hostile takeover, now it should also raise 5 per cent creeping acquisition limit as in such a market condition when the foreign portfolio investors are selling and stocks are seeing heavy price correction companies can face hostile take over. Cash rich promoters can thwart any takeover bid by raising their stake.'