Vedanta delisting has created a lot of buzz and confusion amongst the investors today we give you a all you need to know guide on dealings specifically discussing Vedanta here.
News of Vedanta Delisting surfaced in early May of this year but got confirm only on 5 October. Till date Vedanta has completed the tendering of 6.25 % net shares and by Friday this number is expected to go up by 85-90 % the DIIs and FIIs complete their tendering.
Before we get into why is vedanta delisting let’s discuss what delisting is and what is the actual process behind delisting of a stock from the market.
Procedure Of Delisting
- BRLM APPOINTED .
- Reverse Book Buliding Process as Laid out by BRLM.
- Orders for offer placed by shareholders.
- Trading members appointed for ensuring safety and security of the shareholders deposit.
- Offer opens for ‘n’ number of days.
- BRLM approves the final price.
- Company is taken off exchange.
SEBI operates within particular guidelines for providing a particular framework for the promoter to voluntarily delist their shares from the exchange.This is done by a automated screen based bidding system that captures the sell orders on a online basis from shareholders through respective Book Running Lead Managers (BRLMs) and in which the company can buy back the shares from the shareholders.
Some Of The Key Elements For Successful Delisting Are-
- Will the promoters be able to acquire 90% of shares.
- Delisting proposals and participation to be agreeable by the Institutional.
- Floor Price is Rs.87.25 which is determined by the SEBI regulations.
- Which the Promoters can accept offer or come up with a counter offer.
- Delisting if successful should be pay to minority shareholders in 10 days. Remaining shareholders can unsubscribe within a year @exit price.
- Promoters have to announce a offer price by October 16.
Revery Book Building Process
‘This Book Building process is used for Price Discovery. Which is a mechanism through which offers from various shareholders are collected which are above the floor price.And Buy Back Price is determined using Price Discovery method on the closing date.’
- Process For Reverse Book Building –
- Appointing BRLM
- Price Discovery
Now as we know what’s the procedure behind the Delisting we can now discuss how we can go what has happened and how you can make the most from this Vedanta delisting as a shareholder.
As the stock has already entered the reverse book building process you can place bids higher than of floor price it is usually better to bid above the 200 mark for the current delisting as that is how the discovery price will be decided.
Also you can watch the full video on Vedanta Delisting with video above.
Retail investors should wait until the last moment as it can help with getting a clear win as the discovery price would be close to the bids by the larger shareholders like DIIs and FIIs as well as the HNI’s. As you’ll be able to tender your shares within 1 year.