While most pharma companies have had a decent run in the stock markets last year, the stock of AstraZeneca Pharma India got an additional boost, driven by talks of a possible delisting offer. According to the shareholding norm stipulated in 2010, Indian regulations require minimum public shareholding for listed companies to be 75 per cent.

Companies that currently do not enjoy the stipulated shareholding pattern have time till June 2013 to comply with the regulations. AstraZeneca India, with its promoter holding (AstraZeneca Pharmaceuticals AB Sweden) pegged at about 90 per cent, is a possible delisting candidate. With rumours and speculation about delisting price abounding the markets, the stock has seen a sharp run up in price.

The promoter, however, also has the option of bringing down their holding to the mandated 75 per cent level. But with $2.8 billion net cash with AstraZeneca Pharmaceuticals, the market is betting that the parent would prefer to buyout the remaining shareholders in its Indian subsidiary. It merits a note here that the parent has set a target of $4.5 billion for share repurchases (globally) this year.

Ensuring a full buyout, however, would be challenging. AstraZeneca had in 2010 also tried to delist the Indian business. But the shareholders failed to approve the move in a postal ballot.

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