Hexaware Tech promoters offer ₹285/share for delisting

PALAK SHAH Mumbai | Updated on June 05, 2020 Published on June 05, 2020

After Vedanta and Adani Power, the promoters of yet another large company have jumped on to the delisting bandwagon, sensing the opportunity to acquire shares at a historic low price due to the market crash.

On Thursday, promoters of Hexaware sought to delist their shares from the stock exchange at ₹285 a share. Within minutes the share price of the company zoomed past the offer price and closed the day at ₹311. Market experts say SEBI needs to take a re-look at the delisting norms as such unprecedented times, such as the one we are in today, were never anticipated when the rules were framed.

“The present times are uncertain and hence, all company share prices have crashed to historic lows. Promoters want to take advantage of the situation and de-list. Companies have an option to de-list but there is also a need for SEBI to update regulations that require the company board to spell out as to how their delisting offer benefits shareholders; the pricing should be fair. Still, Hexaware’s delisting price is nearly three times more than its book value. But Vedanta’s price is nearly a third of its book value,” said JN Gupta, founder SES, a proxy advisory.

‘New kind of pandemic’

“Delisting offers in current situations are a new kind of a pandemic,” said Anil Singhvi, founder, IiAS, a proxy firm. “What value are they adding by squeezing the minority shareholders by borrowing from banks. RBI should ask banks not to lend to promoters for delisting and promoters should specify the source of money before they approach shareholders for delisting. If there is no value addition to the economy, banking resources will be wasted on such activity,” he said.

Published on June 05, 2020
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