Hostile Takeover Opportunity

In this recessionary environment, Indian Economy is set to grow at the fastest pace in the world. However, due to global meltdown in equities- particularly in emerging markets, publicly listed companies in India is available at dirt cheap prices.
This has thrown up an opportunity in acquisition and takeover of Indian companies. Recently, Temptation Food has attempted to takeover Kohinoor Foods, largest player in Basmati Rice market in India and a major exporter of rice. Kohinoor Foods also own some of the most reputed brands of basmati rice.
Although, takeover code in India is seen as non discriminatory, India has never seen widespread takeover activities. One of the fundamental reasons for this is large shareholding of government owned financial institutions in Indian companies, who are generally seen as promoters friendly. However, due to rising clout of private financial institutions, the situation is set to change.
Public companies, which have been developed on public capital, cannot be seen as private fiefdom of promoters family. When the company is not efficiently run, hostile takeovers allow efficient management to takeover inefficient management. Naturally, existing management always oppose such takeover. However, studies have shown world over that hostile takeover is in the interest of the minority shareholder, who gets good value for their investment. Further, it is also good for the companies, who get better management. If the target company is run efficiently after takeover, it is also beneficial for the country and economy as a whole.
At the current market valuation, hostile takeover opportunities are screaming. Nevertheless, even friendly takeover opportunity and private equity placement opportunity also exist. Due to severe liquidity crunch, companies are willing to offer their shares at a reasonable price. With growth of Indian economy, these can prove to be great investment opportunity.