Retail investors recovered Rs 12,145 cr from relisting: report

Retail investors, who lost a whopping Rs 61,000 crore in blocked funds due to suspension of trading in 1,450 firms during 1992-2009, could get back Rs 12,145 crore on re-listing of some these firms, says a report by CNI Research.

Between November 2009 and November 2012, as many as 250 companies (out of the 1,450 firms which were suspended) got relisted, as a result of which investors could recover their blocked funds, said CNI Research Chairman and Managing Director Kishor P Ostwal in the report.

"During the past three years close to 250 companies have come out of trading suspension and shares of many of them are at 52-week high and many have changed hands. As a result, these companies today have a combined market cap of Rs 12,145 crore," he said.

The report further says the balance Rs 58,296 crore blocked in such stocks could also be recovered if the regulators allow the remaining 1,200 companies to relist.

Going by the success of relisting, the actual value of money locked in the system could be as high Rs 1 lakh crore, it said.

In November 2009, CNI Research, which deals with capital markets, had in a report said that BSE and NSE had suspended trading in 1,450 firms for not meeting the listing norms. Of these companies, the details about as many as 574 were missing from the exchanges. Of such 574 companies, 536 were on the BSE and the rest 38 were on the NSE.

The present report suspects that as considerable time has lapsed, this could be one of the backdoor de-listing routes, where promoters sell shares in the open market, following violation of the listing norms which prompts the exchanges to suspend them from trading.

The common feature of most of the companies was that the promoters, before violating listing agreements, sold entire stakes. This leads to obvious conclusion that promoters dumped their shares in the market before getting suspended, the report added.