DFM Foods freezes at 20% upper circuit on promoter's delisting proposal

Shares of DFM Foods were locked in upper circuit of 20 per cent at Rs 304.30 on the BSE in Tuesday’s trade after the promoter’s proposed to delist equity shares of the company from the stock exchanges.

AI Global Investments (Cyprus) PCC Limited and AI Darwin (Cayman) Limited expressed their intention to acquire all the equity shares that are held by public shareholders, either individually or collectively, as the case may be; and consequently voluntarily delist the equity shares from the stock exchanges i.e., BSE and National Stock Exchange of India (NSE). JM Financial has been appointed as the Manager to the delisting proposal.

AI Global Investments (Cyprus) PCC the sole promoter of DFM Foods holds 37.05 million equity shares aggregating to 73.70 per cent of the paid up equity share capital of the company.

Data shows that of the remaining 26.3 per cent stake, the individual shareholders have 19.11 per cent holding, whereas, mutual funds hold 3.39 per cent stake in the company as on June 30, 2022.

The discovered price will be determined through the reverse book building process specified in the delisting regulations. “We will separately inform the floor price determined in accordance with the aforesaid provisions, in due course,” JM Financial said in an initial public announcement.

Highlighting the rationale behind the delisting proposal, DFM Foods said, "The proposed delisting will enable the promoter along with members of the promoter and promoter group of the company to obtain full ownership of the company which will in turn provide increased operational flexibility to support the company’s business and make investments in the company."

That apart, the management believed that the delisting of equity shares will result in reduction of an on-going substantial compliance costs that includes costs associated with listing of equity shares such as annual listing fees and fees payable to share transfer agents or such other expenses required to be incurred as per the applicable securities law.

DFM Foods specialises in the production and distribution of processed and packaged snack foods. The company pioneered the entry of packaged snacks into the Indian market with the release of its Crax Corn Rings product.

Later, the company diversified its product line and has recently launched potato chips in select regions. Our Rings, Curls, Fritts and Natkhat brands are now among the most popular snacks in the industry.

The company has state-of-the-art manufacturing units in Ghaziabad and Greater Noida, where all their products are manufactured in modern, automated and hygienic processing facilities. The company also operates through a third-party contract manufacturer at Kashipur (Uttarakhand).

Meanwhile, at the bourses, DFM Foods has outperformed the market by surging 47 per cent in a week, as compared to 1.5 per cent gain in the S&P BSE Sensex. However, the stock has slipped 10 per cent in a year, as against 7.5 per cent gain in the benchmark index. Earlier, it had hit 52-week high of Rs 378 on September 16, 2021 and record high of Rs 487 on June 17, 2016.