Thanks to the slowing Indian economy, corporate valuations are taking a severe beating. This, however, invites multinational companies (MNCs) for a shopping spree. According to a report by India Times, many multinational companies are planning to increase their stakes or go for a merger or de-listing of their Indian arms.
Stake hikes by multinationals gathered pace since June 2010. Stake acquisitions accelerated recently when the Securities and Exchange Board of India (SEBI) and Reserve Bank of India (RBI) modified the rules on minimum public shareholding, the report said.
The recent announcement from the RBI that foreign promoters can hike stake without taking its nod is a sign of encouragement for parent companies, India Times said.
Unilever raised its stake in Hindustan Unilever by 14.8% to a controlling 67.28% in July this year. Meanwhile, Glaxosmithkline Pte Ltd. increased its stake in Indian subsidiary GlaxoSmithKline Consumer from 43.2% to 72.46% in November 2012, the report said.
India Times said that some of the companies, which may raise stakes in Indian subsidiaries through open offers, are Maruti Suzuki, ACC-Ambuja Cements, Nestle, Bosch, Castrol India, Colgate-Palmolive India, Cummins India, Procter & Gamble Hygiene & Health Care, to name a few.
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