Shares of EIH Ltd rose over 8% on Bombay Stock Exchange (BSE), bolstered by market regulator SEBI’s approval of a rights issue of the Oberois-promoted company.
Heavy buying lifted shares of the company, which surged 8.0% before ending Monay at 5.9% or R119.5 on BSE. On the National Stock Exchange, the stock rose 6.2% to close at 119.4 on Monday.
The market watchdog, Sebi, has approved the R1,300-crore rights issue which presents an opportunity for both Mukesh Ambani-led Reliance Industries Ltd (RIL) and ITC to up their stake beyond 15%, which according to the takeover norms, will trigger a mandatory open offer.
RIL holds 14.8% stake in EIH, while ITC has 14.98% stake in the Oberoi group firm.
ITC said it is adopting a wait and watch policy regarding its participation in the proposed rights issue of EIH.
“We will take a final decision as and when the offer details are made available,” an ITC spokesperson said.