An open offer by the promoters of a company to buy out its minority shareholders often results in a spike in the share price.
And especially so when it is at a premium to the prevailing market price. A case in point is ABB Power Products and Systems India Ltd, whose stock rose 11% after its promoters made an open offer at a premium of about 19% to the prevailing market price.
Note that this is less than two months since the stock listed in end-March. ABB Power, which was hived off from ABB India Ltd when the global parent sold its power grid business to Japan’s Hitachi, debuted on bourses a little over a month ago.
Besides the premium to the open offer, the company clocked decent results in the March quarter, the first since its listing.