Market Buzz: Vedanta board approves of its delisting, share price slides
One company that has created a lot of buzz in the Indian market is Vedanta Limited over its proposal to delist the company. Yesterday, the board of Vedanta met and approved to go ahead and delist the company.
The BSE on 18 May was informed about the board decision. The resolution voting of board members was done through postal and e-voting.
The company also added that the floor price for delisting is Rs. 87.25. The notification shared with BSE had a certificate from auditor Price Waterhouse Coopers (PWC).
The company also added that the final delisting offer would be decided as per the reverse book building offer.
The company was trading at Rs. 91.15 (-1.35) today at the NSE. It’s trading close to 52-week low now.
As per reports, Vedanta Resources to buy 48.9 % shares at Rs. 87. 5 apiece. It is going to be a $2.5 billion buyout.
Anil Agarwal, Chairman of Vedanta Resources Limited, said the entire buyout is part of a “complex” exercise to restructure the group.
When the company, which heavily invested in mining, announced its decision last week about delisting, there was anxiety. Many proxy advisory firms cautioned that independent directors of the company must protect the interest of the minority stakeholders. Promoters must not be allowed to take advantage of the undue pricing.
Equities markets have remained volatile in the past two months due to the COVID-19 crisis and general economic slowdown in India and elsewhere.
The price of Vedanta shares was in the range of Rs. 175 to 300 from 2017 to 2019.
Experts believe public shareholders would have liked the shares to be bought at an average of Rs. 225 per share.
The proposed transaction of buying 48.94 % of shares from retail investors is likely to be about Rs. 16,000 crore, which, of course, would depend on final price offerings.
The company also has plans to delist its American Depository Shares at the New York Stock (NYSE) exchange. Plans to deregister from the Securities and Exchange Commission (SEC) is also in the pipeline.