Linde In­dia Shares Gain 20% on Delist­ing News

Com­pany says high cost of list­ing on do­mes­tic bourses one of the key rea­sons

The Economic Times - - Markets: Beating Volatility - Ra­jesh.Mas­caren­has @times­

Mum­bai: The Linde Group said on Fri­day it is delist­ing its In­dian sub­sidiary, cit­ing high cost of list­ing on the do­mes­tic bourses as one of the key rea­sons. Shares of Linde In­dia locked 20% up­per cir­cuit at .₹ 582.65 on Fri­day.

In an ex­change fil­ing, the pro­moter of in­dus­trial gas ma­jor said that the ob­jec­tive of mak­ing the delist­ing of­fer is to ob­tain full own­er­ship of the com­pany, which will pro­vide the pro­moter group oper­a­tional flex­i­bil­ity to sup­port the com­pany’s busi­ness and fu­ture fi­nanc­ing needs.

“Other rea­sons in­clude on­go­ing ex­penses with the main­te­nance of list­ing on BSE and NSE will be re­duced, in­clud­ing in­vestor re­la­tions ex­penses and the need to ded­i­cate man­age­ment time can be ded­i­cated to the com­pany’s busi­ness, and time ded­i­cated to com­pli­ance with list­ing re­quire­ments gets re­duced,” it said. The Se­cu­ri­ties and Ex­change Board of In­dia (Sebi) has made sev­eral amend­ments in the Lis- ting Obli­ga­tions and Dis­clo­sure Re­quire­ments (LODR) Reg­u­la­tions in the last few years pri­mar­ily in­tended to boost cor­po­rate gov­er­nance and trans­parency. Lawyers said these moves have in­creased the costs of stay­ing listed. “Some of the com­pa­nies find it tough to com­ply with the LODR reg­u­la­tions,” said Sud­hir Bassi, ex­ec­u­tive di­rec­tor, Cap­i­tal Mar­kets Prac­tise Group at Khai­tan & Co.

“It is nat­u­ral that those com­pa­nies, which do not re­quire ben­e­fits of list­ing on the stock ex­changes any­more, may rather choose to delist their shares — given the shift in their pri­or­i­ties.” Pro­mot­ers own 75% in Linde In­dia while Re­liance Mu­tual Fund owns nearly 10%.

“In In­dia, there have been sev­eral changes in reg­u­la­tions per­tain­ing to list­ing re­quire­ments, cor­po­rate gov­er­nance stan­dards, takeover code or in­sider trad­ing re­lated dis­clo­sures etc. and that too in a short span of only last few years. Such con­tin­u­ous changes in law is likely to have drawn un­due at­ten­tion of the man­age­ment and the board, which may have pos­si­bly de­terred them from fo­cussing on key re­sult ar­eas of their core busi­ness,” said Vi­nay Chauhan, part­ner, Cor­po­rate Law Cham­bers In­dia.

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