>PROBABLE DELISTING COMPANIES

In June 2010, the Ministry of Finance, Government of India, had issued guidelines pertaining to minimum public shareholding for all listed corporates. The guidelines were later revised in August 2010. As per the guidelines, all private sector listed corporates must have at least 25% public holding while listed PSUs should maintain a minimum public holding of at least 10%. The corporates were given time of three years to abide by the guidelines. The deadline for companies to achieve the stated level of public holding is June 2013.


The corporates, particularly fundamentally strong multinational companies (MNC) may not have the inclination to increase their public holding and may resort to delisting to have better flexibility in taking business decisions. The case for delisting becomes stronger in the current weak trend prevailing in the equity markets, which has led to a substantial fall in stock prices providing an opportunity for such corporates to buy out the remaining stake with the public at lower valuations. The chances of a delisting offer succeeding also appears higher due to a moderation in return expected by the public shareholders and the enhanced willingness to exit the stock even at a marginal premium to current stock prices.


We have analysed and identified MNC companies, which would be probable delisting candidates. We have filtered the companies based on the criteria of a minimum promoter holding of 75% and return on capital employed (RoCE) higher than 10%. We have further looked into the availability of funds to buy back the public holding.


To read the list: DELISTING COMPANIES
RISH TRADER