Promoters of Videocon group, the Dhoot family, picked up 14% stake in Mumbai based broadband service provider, IOL Netcom through secondary market transactions.
In the last couple of months, the investment vehicle of the Dhoot family, Shree Dhoot Trading & Agencies Ltd, has mopped up 11.7% stake in the company through open market purchases. In addition to this, the Videocon group company, Videocon Realty & Infrastructure already holds 1.97% in IOL Netcom.
According to market information, Videocon is planning to take over the mumbai based broadband service provide and this move is a part of the overall game plan.
It is also rumoured that Videocon has already hired advisors to carry out negotiations on their behalf to gain management control in the company.
Videocon, which is planning a nationwide launch of its Direct to Home (DTH) services by the end of this year sees significant strategic synegies with IOL's business and hence is keen on this acquisition.
When contacted, Mr Srivastava, President of IOL Netcom, said that the share purchase by Videocon is not seen as a hostile bid by Netcom, even though there was no understanding between the two companies on the transaction.
IOL's share price has plunged from a high if Rs 580 in August last year to the current levels of Rs 76-77. The company reported a net loss of Rs 2.14 crore on a revenue base of Rs 2.19 crore for the year ended March 31, 2008.