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Aspire Emerging Fund raises holding in KSS

MUMBAI: After being in the oblivion for quite some time, KSS Ltd. (formerly known as K Sera Sera), is in the news.

Aspire Emerging Fund, which is managed by the Mauritius-based Vaibhav Investment Ltd, ventured into enhancing its stake in KSS through open market purchases.

In fact, as a company owned largely by public (public shareholding in KSS stands at a whopping 84.79 per cent as of December 2013), KSS is seeing a huge build-up in institutional activity lately, especially by foreign institutional investors (FII).

The fund has purchased additional 64.25 lakh (6.42 million) shares, which is equivalent to 3.09 per cent of KSS’ paid-up equity capital, from the open markets.

Following the latest acquisition, Aspire Emerging Fund’s holding in the company has increased to 9.89 per cent stake.

However, FII holding in KSS is steadily on the decline. FII holding fell from 16.03 per cent reported in June 2013 to 15.73 per cent in September 2013. It is further reduced to 15.19 per cent as of December 2013.

The latest acquisition by the Mauritius fund will subsequently boost FII holding in the company.

Interestingly, KSS’ counter has been abuzz with heightened activity since the beginning of 2014. Several rounds of block deals have taken place on the counters, with an average of 11 lakh (1.1 million) shares having changed hands in four such deals on the BSE and NSE. These deals were struck in a price range between Rs 12.00 to Rs 12.69 per share.

Lilac Farms is the latest acquirer of the company. On Wednesday, 19 February, it bought 10.49 lakh (1.05 million) shares at Rs 12.69 per share on the BSE.

Ujala Finsec purchased 10.75 lakh (1.07 million) shares on the NSE at a price of Rs 12.05 per share on 11 February.

Due to the sudden pick-up in institutional activity, the KSS counter has been logging higher volume close to 20 lakh (2 million) shares on a two-week average basis.

Incidentally, the share price of KSS surged from sub- Rs 8 at the beginning of the current fiscal to the current level of Rs 12 per share on the BSE. Its market capitalisation stood at Rs 249 crore (Rs 2.49 billion).

Meanwhile, KSS reported a consolidated sales turnover of Rs 12.61 crore (Rs 126.1 million) and a net loss of Rs 0.79 crore (Rs 7.9 million) for the quarter ended December 2013.

It may be recalled that the Securities and Exchange Board of India (SEBI) had passed an ad interim ex parte order in connection with market manipulation using global depository receipt (GDR) against some companies, including K Sera Sera and some investment companies, in September 2011.

SEBI had examined FIIs/Sub accounts of their trading deals matching to alerts that it had set to clamp down market manipulation. During that time, K Sera Sera’s daily average volume had soared above 11.50 lakh shares (1.15 million).

In its order, SEBI refrained K Sera Sera from issuing equity shares or any other instruments convertible into equity shares till further direction.