The Raymond stock fell as much as 9.8% on Thursday, 25th May 2017 with investors upset over the promoters’ intentions to acquire premium property at a price which experts believe is 90% below market value and consequently an “opportunity loss” to the company and minority shareholders.
The loss is estimated at Rs650 crore, or Rs100 per share of Raymond, by proxy advisory firm Institutional Investor Advisory Services (IiAS) which red-flagged the resolution.
The earnings per share (EPS) reported by the company for 2016-17 was Rs4.16.
“In our opinion, the board has failed to protect the interests of the minority shareholders. The company and its directors must prepare themselves for shareholders seeking recompense,” IiAS wrote. Public shareholders, including Life Insurance Corporation of India (LIC), which has a 5.2% stake, hold 56.95% of Raymond’s equity capital while the promoters have a 43.05% stake.
Following a clarification by the firm the promoters would abstain from voting, the stock rebounded to close at Rs682.90 on the NSE. The resolution is to be put to vote at the company’s forthcoming annual AGM on June 5.