Financial institutions have decided to hold at least a 26 per cent stake in power major BSES despite the Reliance group hiking its pie in the company to over 58 per cent.
The Reliance group had hiked its stake in BSES through a second open offer. The Life Insurance Corporation of India, General Insurance Corporation and its four former subsidiaries want to keep their holding in BSES at above the threshold level of 26 per cent.
They currently hold 26.65 per cent in BSES, which declined from a peak of around 36 per cent after the Unit Trust of India sold most of its 8.59 per cent stake in the company. LIC has the chunk of the institutional holding at 15.42 per cent.
"At present we have no plan of any confrontation. As long as the new management wants to enhance shareholder value, we will co-operate with them, a senior LIC official said.
The Reliance group did not respond to a questionnaire sent by Business Standard.
Institutions hold much larger stakes in several top companies in India. The companies include Hindalco, Grasim, ITC, Mahindra & Mahindra and Tata Steel, but they have never interfered in the management of the companies.
Last Saturday, institutions had unanimously voted in favour of a resolution inducting Anil Ambani, vice-chairman and managing director of Reliance Industries, as the chairman of BSES.
They also approved the appointment of Satish Seth, another Reliance nominee, on the board as vice-chairman of BSES.
LIC and other insurance companies did not participate in the open offer as they found the offer price of Rs 230.10 unattractive and are hopeful that shareholder value will increase with the Reliance group taking over BSES.