Essar Oil's delisting begins; shares gain 4%

Essar Oil's stock went up by 4 per cent as delisting offer by the refiner began today.
The stock climbed 3.93 per cent to settle at Rs 217.95 on BSE. Intra-day, it gained 6.34 per cent to Rs 223 - the 52- week high.
On NSE, it rose by 3.85 per cent to Rs 218.20.
Essar Oil Ltd, India's second biggest non-state oil refiner, had earlier this month issued a public notice to delist the company from local bourses by buying out the non-promoter shareholding of 28.54 per cent at Rs 146.05 per share.
The floor price for the delisting offer is Rs 146.05.

Shares will be bought in a reverse book building, beginning today and ending on December 21.

"The proposed delisting of equity shares from the stock exchanges is to achieve complete operational or financial flexibility in furtherance of the company's business or financial needs and enable promoter shareholders and the promoter to pursue strategic opportunities in respect of its investments," according to a company delisting notice.
The group has recently delisted Essar Energy from the London Stock Exchange and also made its locally listed ports business private.
Following changes by Sebi in its delisting regulations earlier this year, the shares are now tendered and settled through the stock exchange mechanism.

Under this mechanism, the stock exchanges provide a separate window for purchase of the shares by the acquirer during the tender period.
When shares are sold through the stock exchange mechanism, short-term capital gains is taxed at 15 per cent and long term capital gains is exempted from any tax liability.