Piramal Glass soars 20% on delisting plan

Piramal Glass is locked in upper circuit of 20% at Rs 92.80 on BSE after its board approved voluntary delisting of equity shares of the company from the stock exchanges.

Promoters of Piramal group plan to delist Piramal Glass from the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) and buy the shares held by the public. The promoters have fixed an indicative offer price of Rs 100 per share for public shareholders, Piramal Glass said in a statement.

“We have received a proposal dated 7 February 2014 from Sri Hari Trust acting through its corporate trustee—PEL Management Services Pvt Ltd (proposed acquirer), to acquire the fully paid-up equity shares of Piramal Glass held by public shareholders in accordance and compliance with Sebi (Securities and Exchange Board of India),” the company announced.

As of December, the promoters held a 74.16% stake in Piramal Glass. Under Sebi norms, promoters of a listed company can hold only up to a 75% stake in it, which gives little headroom for capital infusion in Piramal Glass by its promoters.

“As per the delisting proposal, the objective of the proposed acquirer in making the delisting offer is to give flexibility to the promoter group to provide the desired financial support to the company including modifying the existing capital structure, infusing additional capital and adequately supporting the company’s strategic growth initiatives,” the company said in a statement.

Capital infusion is necessary to improve the liquidity and the performance of the company, it added.

At 1020 hours, a combined 32,000 shares have changed hands on the counter and there are pending buy orders for 1.14 million shares on the BSE and NSE.