Datawatch:Foreign promoters holding above 75% opt to delist

With every passing week in the year 2011, the sentiment of investors is getting dented further. The Indian markets' underperformance continues despite some of the global markets scaling new highs. After being beaten out of shape all week, the markets witnessed a sharp pullback rally on Friday.

In today's Datawatch, we look at foreign promoters holding more than 75% in Indian companies.

Govt Rule for 25% Public Float Mandatory

Last year, the government set out new rule requiring listed companies to have a public float of at least 25%. Listed companies with a free float of less than 25% must increase it by a minimum of 5% a year.

Data Coverage

Data analysis suggests there are as many as 30 companies in which foreign promoters hold close to 75% stake in Indian companies.

Data Analysis

Several multinational firms that have listed their Indian units on local exchanges and retained more than 75% stake may choose to delist. BOC India, Atlas Copco, Kennametal India, HSBC InvestDirect, Goodyear India, Siemens and ABB were among several companies wherein foreign promoter looked to raise stake or delist company in last 1 year.

Analysts suggest that considering the nature of the MNCs, foreign parent companies may not be willing to offload their stakes as directed by the government rule. In such a case, they may opt for the delisting route. The market participants also believe that MNCs in general, do not wish to have intervention in their decision-making process. This may even prompt them to delist company from the bourses.

Source: Moneycontrol.com

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Disclaimer: Datawatch is purely intended to reveal interesting statistics. Moneycontrol sources all price information from BSE/NSE, company information from Religare Technova and shareholding information from BSE. Moneycontrol is not responsible for inaccuracy/non-updation of data. There is no intention whatsoever to arrive at any conclusion or recommend any stocks or sectors. Please consult your financial advisor before taking any investing decisions.