EIH shares soar on stake sale rumours...

Shares of EIH Ltd, which runs Oberoi group of hotels chain, on Friday surged by over 17 per cent on reports that promoters were looking to dilute their holding and potential buyers included Mukesh Ambani-led Reliance Industries group.

The shares rose 17.5 per cent to touch the day's high at Rs 163.95 in early morning trade even as EIH and RIL denied any such development.

East India Hotels chief P R S Oberoi termed the reports as "baseless, untrue and mischievous," while a spokesperson of RIL also "strongly" denied any such move.

The promoters hold a 46.38 per cent stake in EIH, which has a chain of hotels in India and four other countries.

Among other major shareholders, Anil Ambani group's Sonata Investments Ltd owns 1.55 per cent stake in EIH, Russell Credit Ltd has 14.92 per cent and LIC has a 6.53 per cent equity. Besides, HSBC, General Insurance Corp (GIC) and New India Assurance Company also hold less than two per cent stake each in the company.

Reports said promoters of EIH, which runs India's third largest hotel chain after Tata group's Indian Hotels and ITC Welcome group, were in an advanced stage of talks with some leading corporate houses, including RIL and private equity firms, to divest a strategic 26 per cent stake.

When contacted, EIH Chairman and CEO P R S Oberoi said in a statement, "The facts contained in the article are absolutely baseless, untrue and mischievous. The article attributes certain statements made by me. I totally deny what has been stated in the article."

EIH shares were trading 14.8 per cent higher at Rs 160.3 per share after paring some of the early gains.