Shares of Alfa Laval India on Wednesday traded for the last time on the Indian bourses, as its Swedish parent joined a host of other multinational companies (MNCs) delisting their local units from the Indian stock market.
Trading in the shares of the company were discontinued after close of market hours on Wednesday, pursuant to a delisting offer made by its promoter, Sweden-based Alfa Laval Corporate AB, for public shareholders earlier this year.
In its last trading session, the stock on Wednesday closed 0.11 per cent up at Rs 3,946.50 at the BSE. At the NSE also, the stock on Wednesday closed 0.18 per cent higher at Rs 3,948.90.
However, the shares have have jumped 34 per cent since its delisting offer commenced on February 15.
The stock market has witnessed a slew of delisting offers in the recent months and the promoters have been MNCs for most of these entities. Some of the entities having announced or got delisted so far in 2012 include IT firm Patni Computer, media and entertainment firm UTV Software Communications, Carol Info Service and Exedy India. Market experts attributed the trend to an opportunity for the promoters to buy out the minority public shareholders at the low valuations prevailing currently. Several other MNCs, whose foreign parents hold more than 75 per cent, may also come out with delisting offers for their Indian units in the next few months.
According to brokerage firm ICICI Direct, Oracle Financial Services, Novartis, Honeywell Auto, Thomas Cook, Singer, Gillette, Astrazeneca Pharma, Blue Dart, 3M India among others, as probable candidates.
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With Sebi mandating all listed companies to increase public shareholding to a minimum 25 per cent by June 2013, these companies have to take a call sooner or later whether to reduce promoter holding or go for delisting mechanism.
Companies, particularly fundamentally strong MNCs, may not have the inclination to increase their public holding and, therefore, could resort to delisting to have better flexibility in taking business decisions.
The delisting of Alfa Laval India involved its promoter offering to acquire up to 2,040,202 shares, accounting for a 11.23 per cent stake in the domestic entity.
At that time, promoters held 88.77 per cent stake in the company, which came down to 94.45 per cent by March 31.