Can meet Sebi norm in 3-6 months, prefer OFS: Omaxe

Realty major Omaxe failed to meet Securities and Exchange Board of India (SEBI)'s deadline for achieving minimum 25 percent public shareholding.

Although the company got poor response to its OFS on two earlier occasions, Mohit Goel, CEO of Omaxe told CNBC-TV18 that the company was willing to go for it another time. It will be either offer-for-sale (OFS) or institutional placement programme (IPP) and the decision would be taken in their board meeting scheduled on June 15, Goel said. But he is confident of meeting the norms in next 3-6 months.
The company will forego 7 percent dividend announced for the promoters as a part of the interim notification issued by the SEBI for not complying with norms. Below is the edited transcript of his interview to CNBC-TV18.
 
Q: You failed to meet the deadline for achieving that minimum 25 percent public shareholding. Now that it has passed, the next option that the management has to bring down its promoter holding either in the form of an IPP, direct sale, bonus to shareholders etc. What would the management decide to do?
A: Right now, we are looking at options– all these options are there in our mind. Most probably we are going to go for offer for sale (OFS) or IPP. Our board is going to sit again on June 15 and shall decide that time.
Regarding the dilution which we already made, we think we did a good job in diluting 5.5 percent despite the bad market that was prevailing. Lot of initial public offerings (IPOs) were called off last couple of years.
Clarity was given to us unlike all 158 companies in March 2012. Basically we just had one year to dilute our equity and since then we have been meeting all the investors — domestic and international. I am happy with the response of the 5.5 percent dilution Q: Did I hear you right; you are looking at doing either an IPP or an OFS you said?
A: Yes. Q: Did you not hit the market twice with your offer for sale (OFS) and had to withdraw because of poor subscription and response. You want to go down that route a third time?
A: We may. We did OFS twice; first at the rate of Rs 148 floor price and then around Rs 140 which was decided mutually without investment bankers.
_PAGEBREAK_ Q: The response was quite poor. How would do it this time around? Do you expect any impetus to the business to come through to changed sentiment towards your stock or that you are just going to price it lower?
A: I think it is about the price strategy as well as the business strategy. We have been meeting lot of foreign institutional investors (FII) and domestic players. They are getting convinced about our story.
It took us 12 months to convince the investors but now they are getting convinced. So, we are getting lot of investors and queries at the Rs 140 as well. We are confident that next three to six months time we would be able to manage the minimum public shareholding requirement of Securities and Exchange Board of India (SEBI).
If we are not able to do the total 15 percent, we are looking for bonus issue as well but whatever it is we will meet the minimum public shareholding. Q: What is the notification that you have got from SEBI in terms of what penalty you will have to incur now for not meeting public shareholding norms by June 3?
A: Right now there is no monetary penalty. They have taken away our corporate benefits. On May 30 where we had our annual general meeting (AGM), we announced dividend of 7 percent. We will forego our 7 percent dividend for the promoters. That is the only affect of the interim notification given by SEBI to us. Q: Have the voting rights of the promoters been put on freeze?
A: That is also there. But 48 percent is still with promoters; rest 35 percent has been frozen. But that is very temporary thing as in the next three to six months; we would be able to manage our minimum public shareholding. Q: The subscription that you got for your OFS; can you just talk a little about the quality of investors that came in?
A: Out of 5.5 percent, around 3 percent were FIIs. Rest was domestic players. Most of them are long-term investors. One wouldn’t see lot of liquidity as of now because they have a horizon of more than one year.