- Delisting of Shares
Delisting of shares means removal of stocks permanently from company from being listed on a stock exchange. Delisting may be compulsory or voluntary. In a compulsory delisting, the shares are delisted on account of non-compliance to regulations and the clauses of the listing agreement by the company. In a voluntary delisting, the company chooses to get the shares delisted by buying back the shares in a reverse book building process. The offer will have a floor price which will be the 26 weeks average traded price on the exchange. There will be no ceiling price. Based on the price that is discovered in the book building process, the shares will be bought back and the promoter can then get the shares delisted from the exchange. Such events are foreseen by the commodity tips providers for grabbing big profits.
- Mergers and Acquisitions
The shareholding pattern of a listed company may change due to a substantial acquisition of shares and voting rights by an acquirer and persons acting in concert with the acquirer. There are SEBI Regulations that provide the opportunity to public shareholders to exit from the company if they choose to do so. The SEBI (Substantial Acquisition of Shares and Takeover) Regulations, 2011, provides for the acquirer to make an open offer to the shareholders of the target company if the shares acquired in a financial year exceed 5% where the acquirer already controls the voting rights to 25% or more but less than the maximum permissible limit for non-public shareholding. The minimum offer to be made in such a case is 10%. A person holding less than 25% of the voting rights may also make an open offer provided the offer is for a minimum of 26% of the share capital. The trading tips providers often look forward to such events and analyze the effect of mergers on the commodity.
The Acquirer will appoint a merchant banker to manage the open offer. A letter of offer giving details of the offer in the prescribed format is sent to the shareholders. The offer price will be decided based on the formula prescribed by the regulations which takes into consideration the highest price paid by the acquirer to acquire shares in a defined period and the market price. The offer is kept open for a period of 10 days. The shareholder who intends to accept the offer has to fill in the tender form enclosed with the offer letter and submit it to the registrar to the open offer or the merchant banker. Once an investor tenders the shares, it cannot be withdrawn. If the shares tendered in the offer are less than the offer size, all the shares tendered that are valid are accepted. If the shares tendered are more than the offer size then the acceptance will be made on a proportionate basis. Within 10 days of the closure of the offer, the payment for the accepted shares has to be made to the investors.