Ruias mull stake dilution in Essar Oil to increase liquidity

Essar Oil recently commissioned its Rs 24,000 crore (US$4.29 billion), 20-MMTPA refining plant at Vadinar in Gujarat, India, but the company is facing liquidity problems. Managing Director and CEO Lalit Kumar Gupta explained that, “Institutional investors, particularly from overseas, have been expressing concern over the lack of liquidity of Essar Oil stocks. The promoters are considering diluting their stake as soon as they find the market favorable to make the stock attractive to foreign investors.” Ruias, the Mumbai-based promoter of Essar Group, holds a 90% stake in Essar Oil, which is the country’s second largest private refiner. According to Gupta, the stake dilution should take place before the June 2013 deadline set by the market regulator, Sebi, for all promoters to reduce their holding in listed companies to below 75%. (June 6, 2012)