Shares of the multinational companies (MNCs), which would be probable delisting candidates, are in limelight on the bourses on reports that the market regulator Sebi said that it will not extend the deadline to comply with minimum public shareholding norms.
Fresenius Kabi Oncology, Astrazeneca Pharma India, BOC India, Honeywell Automation India, Sharp India, Wendt India, Kennametal India and Elantas Beck India, having promoter holding more than 75% each, have rallied more than 5% each on the Bombay Stock Exchange (BSE) at 1121 hours.
In 2010, SEBI had come out with norms that government firms should have a minimum public shareholding of 10% while for private companies it is 25%. These guidelines were to be complied within three years.
While the private companies have to meet norms by June 2013, for public sector undertakings (PSUs) the deadline is August 2013.
According to analyst at ICICI Securities, the corporates, particularly fundamentally strong MNC may not have the inclination to increase their public holding and may resort to delisting to have better flexibility in taking business decisions.
The case for delisting becomes stronger in the current weak trend prevailing in the equity markets, which has led to a substantial fall in stock prices providing an opportunity for such corporates to buy out the remaining stake with the public at lower valuations, he added.