Shares of Eros International Media gained 8.5 percent intraday Monday on delisting buzz. A media report said investor groups of the company have suggested de-listing the Indian subsidiary to stave off 'transfer pricing' and 'subsidy' concerns.
"Investor groups pointed out that NYSE listed parent has extended interest free loan of Rs 500 crore to the local unit towards production expenses. A move to take Indian subsidiary private - either through a buyback or swapping shares with ADRs - would mitigate these concerns and make the structure more tax efficient," the report explained.
Promoters Eros Worldwide FZ LLC and Eros Digital Private Limited 74.52 percent stake in the company (as of March 2015) with a market capitalisation of more than Rs 4,000 crore.
The report also suggested that shareholder activism has stalled the television foray of Eros International Media prompting Bollywood's biggest studio to focus instead on building a digital streaming service keeping pace with rapid strides in India's mobile internet market.
Meanwhile, the company unveiled successful box office gross of Rs 165 crore worldwide for its latest release, Tanu Weds Manu Returns.
At 09:47 hours IST, the scrip of Eros International Media was quoting at Rs 467.30, up Rs 24.90, or 5.63 percent on the BSE.
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