Prominent founding CIAL investor sells further 2.5mn shares

KOCHI: The discerning shareholders of Cochin International Airport Ltd (CIAL) are in a fix after one of the founding promoters and the second largest investor in the company until two years ago, offloaded a sizeable chunk of his shares during the past two years.

In fact, the CIAL shares are sold like hotcakes in the market (grey market as shares not yet listed) at prices upwards of Rs200 a piece.

What surprises the analysts and brokers now is why NV George (George V Nereaparambil), who used to own the second largest holding in the coveted airport, is diluting his stake in the company at a time when the company is doing extremely well setting a track record of consistent dividend payment and profitability for more than a decade.

The other prominent CIAL shareholders include Yusaffali, Synthite Industries, Housing and Urban Development Corporation (Hudco), SBI, Air India and Federal Bank.

George has already sold about 1.21 crore shares during the last two years thus bringing down his stake to about 8.82 per cent from the earlier close-to12 per cent.

There were media reports about two years ago that NV George (George V Nereaparambil), had put his entire stake (close to 12 per cent) in Cochin International Airport Ltd (CIAL) on the block.

It is not known at what price the shares have changed hands. Though businessbenchmark.news tried to elicit response from George as regards the share dilution, he was not available over phone. Talking to this portal a stock broker said one need not read too much into the share sales by investors as these are normal things in the share business.

The annual financials of CIAL show that George, who has his business interests spread over the Gulf in a big way, and in Kerala, albeit small and relatively new, has sold 96 lakh shares during 2017-18 and 25 lakh shares during the last financial year, resulting in MA Yusaffali filling the slot of the second largest shareholder in CIAL, the largest shareholder being the Government of Kerala with 32.4 per cent.

Records also show that George has sold shares 20 times during 2018-19 alone, at times in lots as small as 500. During the past three years, while Yusaffali enhanced his shareholding from 7.87 per cent to 9.88 per cent, that of George dropped from 11.965 per cent to 8.816 per cent – paring more than by a quarter.

CIAL has registered a net profit of Rs166.92 crore on a turnover of Rs650.34 crore during the financial year 2018-19. The board of directors has proposed a dividend of 27 per cent to the investors creating a record of sorts for a company with government as its largest shareholder.

Though CIAL did a 1:4 rights issue in 2014, listing of its shares on stock market as desired by a big chunk of CIAL’s retail investors, may prove to be far-fetched as things stand now, according to analysts.

Some also believe that a public issue or listing could bring down the traded price of CIAL shares with a book value of about Rs36 as of March 31, 2019.

 

 

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