AgenciesINEOS Styrolution, a specialty chemical firm, could be the first company to be delisted from the Indian bourses in the past two-and-a-half years if its promoters and public investors agree on the price to be discovered through the reverse book building process scheduled later this month.
If INEOS succeeds in delisting its Indian arm, it will set a precedent for the other three proposals - of Vedanta, Hexaware Technologies and Adani Power.
For existing investors, it is an opportunity to exit while for new investors there will not be any arbitrage left in the INEOS counter, said market participants.
“Existing investors can tender their shares at the current market price or slightly above as against the delisting offer price of Rs 480. It’s not advisable for the new investors to enter this counter for delisting gains,” said Ambareesh Baliga, an independent analyst.
The UK-based promoter INEOS Styrolution APAC, which currently owns 75% of stake in the Indian firm, has announced the voluntary delisting at Rs 480 per share. Investors can tender their shares between July 16 and July 22.
The stock rallied 13% so far this year to close at Rs 844 on Thursday. More than 10,000 retail shareholders control 13.17% stake in the company. Institutions, mainly Reliance Mutual Fund and Sundaram Mutual Fund, hold 3.96% and 1.84% stakes, respectively, in INEOS.
The company for the first time in more than 10 years reported a net loss of Rs 12 crore in FY19, compared with Rs 66 crore in profits in FY18 or Rs 69 crore profits in FY17.
INEOS Styrolution is also the first delisting offer to hit the market after the delisting regulations were notified early last year. In November 2018, the Securities and Exchange Board of India changed delisting regulations by adding a provision for promoters to make a counter offer if they can’t accept the discovered price.
This must be done within two days of the determination of the discovered price. The final delisting price or discovered price will be determined in accordance with the reverse book building process. The promoter has the sole discretion to accept or reject the discovered price or to make a counter offer.
However, during the delisting offer by the BOC Group to purchase Linde India shares early last year, the operational guidelines for delisting were not in place and hence BOC Group could not make a counter offer after the discounted price was over Rs. 2,000 against the floor price of Rs 428.50
If INEOS succeeds in delisting its Indian arm, it will set a precedent for the other three proposals - of Vedanta, Hexaware Technologies and Adani Power.
For existing investors, it is an opportunity to exit while for new investors there will not be any arbitrage left in the INEOS counter, said market participants.
“Existing investors can tender their shares at the current market price or slightly above as against the delisting offer price of Rs 480. It’s not advisable for the new investors to enter this counter for delisting gains,” said Ambareesh Baliga, an independent analyst.
The UK-based promoter INEOS Styrolution APAC, which currently owns 75% of stake in the Indian firm, has announced the voluntary delisting at Rs 480 per share. Investors can tender their shares between July 16 and July 22.
The stock rallied 13% so far this year to close at Rs 844 on Thursday. More than 10,000 retail shareholders control 13.17% stake in the company. Institutions, mainly Reliance Mutual Fund and Sundaram Mutual Fund, hold 3.96% and 1.84% stakes, respectively, in INEOS.
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The company for the first time in more than 10 years reported a net loss of Rs 12 crore in FY19, compared with Rs 66 crore in profits in FY18 or Rs 69 crore profits in FY17.
INEOS Styrolution is also the first delisting offer to hit the market after the delisting regulations were notified early last year. In November 2018, the Securities and Exchange Board of India changed delisting regulations by adding a provision for promoters to make a counter offer if they can’t accept the discovered price.
This must be done within two days of the determination of the discovered price. The final delisting price or discovered price will be determined in accordance with the reverse book building process. The promoter has the sole discretion to accept or reject the discovered price or to make a counter offer.
However, during the delisting offer by the BOC Group to purchase Linde India shares early last year, the operational guidelines for delisting were not in place and hence BOC Group could not make a counter offer after the discounted price was over Rs. 2,000 against the floor price of Rs 428.50
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