Baba Arts Ltd Faces Promoter Change Amidst Mandatory Open Offer

Baba Arts Limited has announced a mandatory open offer by Skybridge Interactive LLP to acquire 132.92 lakh shares, representing 25.32% of the company's equity, at an offer price of ₹6.00 per share. The tendering period for this offer is scheduled from June 09, 2026, to June 22, 2026.

Reader Takeaway: Promoter change and ₹7.65 crore liability are key factors for shareholders to consider.

What just happened

Skybridge Interactive LLP is launching a mandatory open offer for Baba Arts Ltd. The offer is for 132.92 lakh shares at ₹6.00 each, constituting 25.32% of the company's total equity.

Why this matters

This open offer signifies a change in promoter control for Baba Arts Ltd, moving from Mr. Gordhan Prabhudas Tanwani to Skybridge Interactive LLP. This transition could bring new management strategies and potential business realignments.

The backstory

For the nine months ending December 2025, Baba Arts Ltd reported revenue from operations of ₹9.79 crore and a Profit After Tax of ₹0.55 crore. The company's net worth as of FY 2025 stood at ₹26.76 crore. However, a contingent liability of ₹7.65 crore related to a service tax demand dating back to FY 2011-12 to 2014-15, for which an appeal is pending, poses a significant risk.

What changes now

Skybridge Interactive LLP intends to provide managerial oversight and enhance corporate governance. While the existing business line is not immediately slated for change, the acquirer reserves the right to explore future strategic initiatives. The listing status of Baba Arts Ltd is intended to be maintained.

Risks to watch

Investors should be aware of a substantial contingent liability of ₹7.65 crore (excluding interest and penalties) from a service tax demand. If the pending appeal goes against the company, it could affect future cash flows. Furthermore, if the open offer is fully subscribed, the public float will shrink to a mere 0.01%, creating significant liquidity risks and limited exit opportunities for remaining shareholders. The company also has a history of past SEBI non-compliances, which the new management must address.

Peer comparison

(No specific peer comparison data available in the filing.)

Context metrics (time-bound)

• Revenue from Operations (9M ended Dec-25): ₹9.79 crore
• Profit After Tax (9M ended Dec-25): ₹0.55 crore
• Net Worth (FY 2025): ₹26.76 crore
• Contingent Liability (FY 2011-12 to 2014-15): ₹7.65 crore

What to track next

Shareholders should closely monitor the outcome of the service tax appeal and assess the liquidity implications post the open offer. The acquirer's experience in the media and entertainment sector, given their background in technology and gaming, will also be a point to track.