MUMBAI: The Subhash Chandra-controlled Essel Group’s move to mount a hostile bid on IVRCL, a Hyderbad-based infrastructure player, has put the spotlight on companies in which promoter holdings are precariously low.

An ET study of 3,000 listed companies shows over 15% of them, or 480 firms, are vulnerable to hostile takeover risks with promoter shareholding below 25% of total equity.

With the new takeover code allowing acquirers to make an open offer for an additional 26% on purchase of 25% stake of the target company, it gives acquirers an opportunity to gain easier control of targets. Consultants and lawyers said the risk of such hostile takeover bids for the companies with lower promoter holdings has only increased.

“The danger of hostile takeover bids for promoters has always been there for many years, but this risk has certainly gone up as the new takeover code has given enough incentive to mount an attack,” said KH Viswanathan, executive director, RSM Astute Consulting.

Of the 3,000 companies, promoter’s stake in 290 companies are below 15%. Companies, in which promoters hold less than 30% include United Spirits, United Phosphorus, Opto Circuits, India Cements and Mindtree among others.

“Companies with hidden values such as IPRs (intellectual property rights), huge real estate bank and unlisted subsidiaries could be targets of such hostile bids,” said Vishwanathan.

India’s relatively nascent mergers and acquisitions (M&A) space has seen very few hostile takeover attempts in the past. The first such move was made by London-based businessman Lord Swraj Paul, who launched a bid in the early 1980s to take over Escorts and DCM, which was thwarted by the Nandas.

Most recently, hotel chain operator EIH managed to get Mukesh Ambani, Reliance Industries’ chairman, to buy a stake in the company to prevent ITC from launching a takeover bid for the company. ITC has been steadily accumulating EIH shares in the last few years.

“In India, most companies are ruled by the promoters who always safeguard their interest. Hence taking on them is not an easy task. Only those who had the appetite to fight the management or promoters have gone ahead with hostile bids,” said Sandeep Parekh, founder of Finsec Law Advisors, and a former Sebi executive director.

Since the takeover bid by Essel, E Sudhir Reddy, the promoter of IVRCL, has been trying to mobilise support from Andhra-based construction companies in his defence.