For delistings, small is beautiful for offers less than Rs 100 cr

Smaller companies have been more successful at delistings, with 20 out of the 38 successful delisting offers being less than Rs 100 crore in size. In contrast, less than a fifth of the successful delistings have been greater than Rs 500 crore in size, according to Sebi data. The statistics looked at the period from March 2014 stretching back to June 2009, the latter being the last time delisting norms were changed. Sebi came out with a discussion paper on new delisting norms last month.

The current rules require the entity looking to delist the company to reach the higher of ninety per cent stake in the company or acquire at least 50% of the offer size. Sebi is mulling the removal of the latter clause, according to its discussion paper issued last month.
 

Sizing up	Success rate for smaller companies has been superior
Size (Rs cr)	Total offers	Successful offers
0-50	15	14
50-200	9	3
200-500	7	6
>500	7	6
Total	38	29

The regulator is also looking to reduce the time taken for the delisting to be reduced from 137 days to 34 days. It is also looking to remove the need for a special resolution and in-principal approval from stock exchanges to make the process faster. It also wants to allow delistings to take place through the exchange platform to help investors avoid the tax that they would have paid if they surrendered their shares in off-market transactions.

Expensive preposition	The discovered price for half of the companies has been over 50 per cent of the floor price
Premium paid* (%)	No. of companies
0	7
0-25	6
25-50	6
50-100	8
100-200	8
Over 200	3

 

Hope floats	Promoter holding hasn't had a conclusive impact on delisting bids
Promoter holding (%)	Total offers	Successful offers
55-60	1	1
60-65	1	1
70-75	16	12
75-80	5	5
80-85	3	3
85-90	7	2
90-95	5	5
Source: Sebi discussion paper; *Premium paid over floor price