Preferential issues: Bonanza for promoters

Promoters of 43 companies, who subscribed to substantial preferential allotments amid a weak equity market during FY03, are now sitting on a profit pile of at least Rs 305 crore (Rs 3.05 billion).

The promoters allotted to themselves 231 million shares, valued at Rs 473.84 crore (Rs 4.738 billion), between April 1, 2002 and March 31, 2003. The market value of these shares now stands at Rs 781.30 crore (Rs 7.813 billion).

M Ravinder and N Prasad, the promoters of Matrix Laboratories, are the biggest beneficiaries. Both the promoters raked in Rs 179.77 crore (Rs 1.797 billion) in the current rally. They were allotted 25.31 lakh (2.531 million) shares last year at Rs 107 a share.

The market value of Matrix Laboratories soared to an all-time high of Rs 817.30 on September 3, boosting the company's valuations by Rs 179.77 crore to Rs 206.85 crore (Rs 2.068 billion).

Individually, the promoters N Prasad and M Ravinder are richer by Rs 5.35 crore (Rs 53.5 million) each on account of their holding of 165,475 shares each.

The promoters of Jain Irrigation too benefited from the market rally, with promoter Aqua India-I and Aqua India-II a making cool profit of Rs 84.57 crore (Rs 845.7 billion).

The promoters were allotted 2.365 crore (23.65 million) shares at Rs 37.10 a share to enable them to take over the company from the original management.

They infused Rs 87.76 crore (Rs 877.6 million) in the process. But now, the current value of their investment stands at Rs 172.33 crore (Rs 1.723 billion).

Kamal Biyani must be happy with his investment of Rs 16.93 crore (Rs 169.3 million) in Pantaloon Retail, which has appreciated to Rs 76.38 crore (Rs 763.8 million) in the current market. Biyani allotted to himself 48.65 lakh shares at an average Rs 41 a share.

With the market value of Pantaloon Retail soaring 283 per cent over the allotment price, Biyani is now richer by Rs 59.46 crore (Rs 594.6 million).