RK Damani portfolio stock VST Industries up 20% on block deal

Shares of VST Industries Limited soared 20 percent to Rs 4,060 and were locked in the upper circuit following a report that 4 percent equity stake in the company was sold in a block deal.

Moneycontrol couldn’t immediately ascertain the buyers and sellers of the deal. As many as six lakh shares changed hands during trade today, significantly higher than one-week average of 5,000 and one-month average of 16,000 shares.

In the last one year, the stock has gained over 23 percent.

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Ace investor and trader Radhakishan Damani has a 25 percent stake in the cigarette maker, through his investment arm Bright Star Investments. Derive Trading and Resorts Private Limited, where Damani is a director, also has 4.76 percent in the company.

Back in 2001, Damani had accumulated a shade below 15 percent in VST Industries at an average price of Rs 88 per share.

He was willing to pay Rs 112 per share for an additional 20 percent in the company, a 26 percent premium to the market price on the day he announced the bid.

A messy bidding war ensued, as ITC entered the fray with a counter-offer to thwart Damani, counted among India’s savviest stock market investors, from taking control of VST.

ITC initially made an open offer at Rs 115 per share and later increased that to Rs 126 per share. Damani eventually raised the price and size of his bid -Rs 151 per share for 30 percent of the company – but failed to win over the banks, insurance companies and financial institutions that together held 22 percent of the company.

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