This is in reference to the public announcement by Pfizer Inc., to raise its shareholding in its Indian arm Pfizer Ltd., from 41.23% to 75%.This decision comes a fortnight after Swiss drug multinational Novartis AG announced its plan to raise its share holding in Indian subsidiary Novartis India Ltd to 90%, from the current 51%, through a tender offer to public shareholders.
Offlately, it has been observed that the pharmaceutical corporations are now in a mood for consolidating its shareholdings, especiallly when the share prices are all time low due to financial turmoil. This consolodation would pave the way for these corporations to delist there shares from the stock exchanges and would have a free hand over the affairs of the corporations away from stock exchange and SEBI interferences.
Why the firms would like to consolidate their shareholdings?
· The growth potential the Indian economy offers is huge with about INR 55,000 Crores in the market and every prudent businessman would like to have the most of this growth opportuinity.
· Ceratin issues related to Transfer pricing (arms length and other types of transactions) as per section 90- 94 of the Income Tax Act, 1961.
· There would be synergy in working and there would be proper management control and there would be no Board room clashes or deadlocks (as the foreign firms want to increase their holdings beyond 74% as under Indian corporate law an investor with at least 26% stake can block any special resolution).
· The corporations are getting their shares for so cheap , then why not have it. They know the maket is not properly valuing there shares at this time so its bettre to go for buy-back.
· There is transfer of technolgy from the more developed and modern laboratories of these MNC’s and definitely these MNC’s would not like to share this with the other Indian counterparts.
Offlately, it has been observed that the pharmaceutical corporations are now in a mood for consolidating its shareholdings, especiallly when the share prices are all time low due to financial turmoil. This consolodation would pave the way for these corporations to delist there shares from the stock exchanges and would have a free hand over the affairs of the corporations away from stock exchange and SEBI interferences.
Why the firms would like to consolidate their shareholdings?
· The growth potential the Indian economy offers is huge with about INR 55,000 Crores in the market and every prudent businessman would like to have the most of this growth opportuinity.
· Ceratin issues related to Transfer pricing (arms length and other types of transactions) as per section 90- 94 of the Income Tax Act, 1961.
· There would be synergy in working and there would be proper management control and there would be no Board room clashes or deadlocks (as the foreign firms want to increase their holdings beyond 74% as under Indian corporate law an investor with at least 26% stake can block any special resolution).
· The corporations are getting their shares for so cheap , then why not have it. They know the maket is not properly valuing there shares at this time so its bettre to go for buy-back.
· There is transfer of technolgy from the more developed and modern laboratories of these MNC’s and definitely these MNC’s would not like to share this with the other Indian counterparts.
No comments:
Post a Comment