 New delisting norm and closely held cosPublished on Mon, Dec 04, 2006 at 11:25 | Source : Moneycontrol.com Updated at Mon, Dec 04, 2006 at 11:36 43 Investors following Agro Chem Punja. Share this News with them.
The year 2006 has seen as many has 31 companies going for reverse book building process. Some of these companies' buyback offers failed to entice shareholders, while some others have gone for a delisting after their buyback offer. In its revised draft regulations, SEBI suggested doing away with the current book-building route for determining the price at which shareholders of Delisting companies tender their shares. The market watchdog has currently proposed the delisting price to be the higher of the fixed price, which is floor price plus a premium of 25%, or the fair value determined by an accredited rating agency plus a premium of 25%. One condition for mandatory delisting is public shareholding in the company shrinking to below the minimum level prescribed in the listing agreement. The most recent companies to opt for reverse book building are Agro Chem Punjab , ETC Network , ICI India and SRF Polymers . Of these only SRF's buyback offer is still open. It is currently trading at 152.30 and has a buyback offer (closes on December 7, 2006) of Rs 275.65 a share. Post buyback, these companies would be seeing significant increase in their promoter's holdings. Interestingly, in March 2006, parent Ingersoll-Rand Company, US, had come out with an open offer to delist the Indian company's shares by buying out the remaining 24% at a floor price of Rs 345 per share. The parent failed to get any response. The market was not willing to offer the shares even at a PE of 38 (EPS of Rs 9). With Sebi proposing a change in delisting norms Moneycontrol checks on the companies that are closely held by their promoters. Among all listed companies, there are 208 companies that have promoters holding of 80% and above. Most of these are small cap and midcap companies but there are companies that have fairly large marketcap too. Some of these are private players ( Sun TV ) while others are Government of India owned. The third types are the multinational associates like Astrazeneca . List of companies with over 89% holding on Page 2
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