Vedanta Ltd’s delisting went from almost-a-success to failure on account of a large quantity of unconfirmed orders, forcing the company to approach market regulator on Friday to grant an extension of one day but SEBI did not grant any extension. Such bidders enter the fray just to scuttle the whole process. The company's promoter Vedanta Resources deemed the delisting offer to have failed after lower than required shares were offered. By 7:35 pm, the BSE website indicated that only 125.47 crore shares were confirmed to be tendered. Reports have stated that a technical glitch in the bidding process could have caused a wrong result . This may come out as a negative point for Vedanta as the promoter did not make a counteroffer. This will alert our moderators to take action. Copyright © 2020 Bennett, Coleman & Co. Ltd. All rights reserved. India Inc has a number of examples of delisting offers having met with failure and thus this is nothing new or shocking. The buy-back price will eventually be determined after the offer closes. But it turned topsy-turvy later in the day as the evening approached. The BSE on October 9 evening showed 137.74 crore shares, out of a total 169.73 … Shares of Vedanta on Monday plummeted nearly 21 per cent after the company's delisting went from almost-a-success to failure on account of a large quantity of unconfirmed orders. There are multiple ways to read this, even if each individual perspective doesn’t give the full picture. Vedanta chairman Anil Agarwal, in an interview with CNBC-TV18, said the company will go for a counteroffer for the buyback of shares "if need be". The main reason for the failure of the delisting process of Vedanta Ltd is not clear. The issue with Vedanta though, is that the way the process played out has raised some questions. Home / Business / Vedanta plunges as delisting plan fails The stock tanked 23 per cent to Rs 94 on BSE. Choose your reason below and click on the Report button. Till the final lap, it was assumed that the Vedanta offer would sail through. Gupta, the co-founder of the proxy advisory firm Stakeholder Empowerment Services, is surprised. Vedanta Ltd's delisting went from almost-a-success to failure on account of a large quantity of unconfirmed orders, forcing the company to look for options to extend the buyback period by a day. But what has caught Gupta and his ilk totally off guard, is the non-confirmation of bids worth 12.31 crore shares. In the end, the non-confirmation of a sizable number of bids appears to have poured cold water into the whole delisting exercise. Shares of Vedanta Ltd had plummeted by more than 20 per cent on Monday after the company’s delisting went from almost-a-success to failure on account of a large number of unconfirmed orders. Your Reason has been Reported to the admin. The offer becomes successful only if a minimum number of shares are tendered. Photo: Reuters/Danish Siddiqui/Files. Shares of Vedanta on Monday plummeted over 24 per cent after the company’s delisting went from almost-a-success to failure on account of a large quantity of unconfirmed orders. Not because the offer fell through, which would be fine. A man walks past the Bombay Stock Exchange (BSE) building in Mumbai, India, March 6, 2020. As analysts scratch their heads to understand why the delisting offer failed at the eleventh hour, a few questions have begun to be asked on how the entire process played out. Only at that level, the promoters’ holding could breach the 90% level as required by the rule in a delisting exercise. Aditya Birla Sun Life Tax Relief 96 Direct-Growt.. Vedanta delisting failure: What brokerages say. Days Trial. The rules say that the offer must have closed at the close of the trading hour. First, Vedanta had to get its board of directors to approve - which it did. Vedanta shares plunged as much as 20 per cent in mid-morning deals on Monday due to the miner's failure to buy back shares and delist itself, compelling it … What went wrong? This deficit in eventual bids turned the delisting offer into a failure. The total public holding was in the vicinity of 169.73 crore shares. The de-listing offer of Vedanta Ltd has failed, according to the data available on the stock exchange website. Then it had to decide on a minimum floor price at which the shares would be bought during the delisting period. Due to the failure of the delisting process, Vedanta would not acquire any shares from shareholders. A final answer should be given on this tale of technical glitches and unconfirmed bids. Vedanta delisting failure: The options in front of shareholders. Shareholders were waiting for the dividend announcement from Vedanta after the company's delisting process failed this month. Vedanta decided on a low price of ₹87.50. The failed delisting of Anil Agarwal’s Vedanta Ltd has narrowed the refinancing options for its parent company Vedanta Resources, raising risks over the … At the moment, the only thing that is known officially is that the delisting offer has failed. J.N. Who are these bidders who failed to confirm? 15 The failure of the delisting offer is sentimentally negative for Vedanta. Tomorrow is different. Days Trial The question now being asked here is whether the technical glitch was the only reason behind any non-confirmation of bids. If the reverse book building process is not extended, then as per the last available data Vedanta Resources Ltd., the parent company making the delisting offer, will have insufficient shares to cross the 90% shareholding threshold and the delisting will have failed. Does it reflect a sense of confidence in the company by the shareholder community? There is a rider, though. But technical hiccups earlier in the day, on account of which some shareholders reportedly faced trouble in tendering shares, forced the authorities to extend the bidding time till 7 pm. Last week, Vedanta Ltd’s delisting went from almost-a-success to failure due to a large number of unconfirmed orders. +Includes DocuBay and TimesPrime Membership worth ₹1499 & ₹999 resp. Had the delisting offer gone through, it would have helped the investor community make a reasonably satisfactory exit from Vedanta. Thus, the Delisting Offer is deemed to have failed in terms of Regulation 19 (1) of the Delisting Regulations," Vedanta said in the exchange release. Vedanta Ltd's delisting went from almost-a-success to failure on account of a large quantity of unconfirmed orders, forcing the company to look for options to extend the buyback period by a day. Or, does it indicate poor judgement on the part of the investors? So, you see, there are considerable benefits. Confusion over Vedanta shares tendered for delisting; some see buying opportunity, Vedanta hits lower circuit as delisting plan fails, Making shared workplace flexible and safe. Vedanta chairman Anil Agarwal, in an interview with CNBC-TV18, said the company will go for a counteroffer for the buyback of shares "if need be". Vedanta delisting: The group's failed attempt at delisting an India-listed entity has triggered a debate on rules concerning efforts by a foreign promoter to take an India-listed company private, with some officials questioning the 'FDI' tag used for such a move and the limited disclosures made through the official stock exchange route Get more India News and Business News on Zee Business. The delisting was sought to be done through a process of ‘reverse book-building’. The shares of Vedanta Limited are listed on the BSE Limited and the National Stock Exchange in India and its American Depository Receipts are listed on the New York Stock Exchange. Why follow tips? Choose your winners rationally in 3 simple steps! After all, public shareholders tendered 137.1 crore shares. The explanation being put forth is that a technical glitch in the tender process perhaps gave the game an unintentional result. In this instance, at least 134.12 crore shares are required to be validly tendered for the delisting offer to be declared successful. Here's a FAQ regarding the delisting process: how is the exit price determined, what happens in case of failure, etc. For reprint rights: Why Sebi needs to probe Vedanta delisting fiasco, Twist in Vedanta delisting after LIC raises cost, Vedanta Delisting: Share tendering dismal so far, Vedanta delisting fails; company to return all the shares tendered, Vedanta delisting: Anil Agarwal may come up with a counter offer, Inciting hatred against a certain community, 15 Vedanta’s shares tumbled after its delisting bid failed, bringing back into focus its undervaluation. On NSE, it tumbled 20.68 per cent to close at Rs 96.65. With institutional investors such as the LIC quoting over Rs 300 a share, the final discovery price would have been far higher than the offer price announced by the promoters. Vedanta Ltd's delisting went from almost-a-success to failure on account of a large quantity of unconfirmed orders, forcing the company to look for options to extend the buyback period by a day. Last week, Vedanta Ltd's delisting went from almost-a-success to failure due to a large number of unconfirmed orders. Limited and its indirect subsidiaries namely , Vedanta Holdings Mauritius Limited and Vedanta Holdings Mauritius II Limited, (collectively to be referred as “Acquirers” ) that the Delisting Offer is deemed to have failed in terms of Regulation 19(1) of the Delisting Regulations . The BSE on October 9 evening showed 137.74 crore shares, out of a total 169.73 crore shares held by the public, to have been offered for sale to promoters, larger than the threshold of 134.12 crore. The attempt to take Vedanta private follows a series of moves by Agarwal to simplify his investments, including delisting London-based parent Vedanta Resources in … “If you have put in a bid, why haven’t you confirmed it?” asks Gupta. On October 9th, the bidding process was supposed to close at the end of market hours, but the shareholders were facing certain technical problems. Download The Economic Times News App to get Daily Market Updates & Live Business News. Officials, however, said the group's failed attempt at delisting Vedanta Ltd has come under the scanner of stock exchanges, regulatory authorities and the government after their public statements claimed that the delisting "would have resulted in FDI (Foreign Direct Investment) inflow of over USD 3.15 billion into the Indian economy and helped boost growth between 0.4 per cent and 0.8 per cent through … The story was playing out fairly on the expected line for the most part of the final day of the closure of the offer, i.e. But delisting a company is a lengthy and difficult process. This price is then widely communicated to the shareholders. Includes DocuBay and TimesPrime Membership worth ₹1499 & ₹999 resp. At the moment, the only thing that is known officially is that the delisting offer has failed. When contacted, Vedanta spokesperson refused to comment on the debt position or impact on revenues due to the shutdown of copper and iron ore businesses. Let's reshape it today, Hunt for the brightest engineers in India, Read Stock Insights by ET for a quick analysis. Sharp Insight-rich, Indepth stories across 20+ sectors, Access the exclusive Economic Times stories, Editorial and Expert opinion. Shareholders then communicate their bids through the trading members (brokers, to be precise). It is evident that corporate governance issues are weighing heavily on Vedanta’s valuations MUMBAI : Shareholders of Vedanta Ltd saw their hopes dashed as … In a regulatory filing, Vedanta said its buyback offer is deemed to have failed as […] And these remained unconfirmed despite a four-hour extension. The spokesperson also refused to comment on the likely delisting price or if the group could raise more money to … October 9. Once this buy-back price is arrived at, all bids or offers equal to or below this price will be accepted. Investec has … Mumbai: India lost out on a probable $ 3.15 billion in FDI investments from the failure of Vedanta's delisting process. Non-serious bidders are a dime a dozen in any bidding exercise, especially when it comes to project tenders – India’s power sector is a classic example. What We Should and Shouldn’t Take Away from Vedanta’s Delisting Failure, indicate that capital markets regulator SEBI may ask the BSE to probe and get to the bottom of the matter. Media reports indicate that capital markets regulator SEBI may ask the BSE to probe and get to the bottom of the matter, an exercise whose results will no doubt be keenly watched. According to a Business Standard report, Vedanta Resources founder Anil Agarwal and the management committee of Vedanta Limited are scheduled to meet Monday (October 12) to discuss the next course of action after the latter failed in its delisting attempt on Friday. The floor price for tendering the shares has been set at Rs 87.25 by the company. However, at 1.49 pm it recovered marginally to trade at Rs 98.85. Photo: Reuters/Francis Mascarenhas/File photo. Shares of Vedanta on Monday plummeted nearly 21 per cent after the company’s delisting went from almost-a-success to failure on account of a large quantity of unconfirmed orders. How much holding do they control together? Thereafter, stock exchanges step in to facilitate the process of reverse book-building via an online bidding system. The stock plunged 20.60 per cent to close at Rs 96.95 on BSE. Shares of Vedanta were down over 18 per cent at Rs 99.8 at noon on Monday after the failure of the delisting offer. Delisting failure: Vedanta execs, promoters to mull future action on Monday DU cut-off list 2020 of top 8 Delhi University colleges: Subject-wise list Delhi coronavirus update: 48 deaths take toll to 5,740; total cases past 306,000 During the day, it tanked 23 per cent to Rs 94. Shares of Vedanta on Monday plummeted close to 21% after the company’s delisting went from almost-a-success to failure, on account of a large quantity of … The onus is now on the authorities – the stock exchange mandarins and the market regulator – to give a final answer. Under this, the company concerned decides on a floor price. After the failed delisting, shares of Vedanta Limited tanked 22% on Monday to trade at Rs 94 per share. For instance, one question being asked is that if technical problems were the reason, why didn’t they confirm even when the authorities had extended the bid timing beyond the normal trading hours? A bird flies past the logo of Vedanta installed on the façade of its headquarters in Mumbai, January 2018. Vedanta Ltd. ’s delisting failed as 12.3 crore shares offered were deemed invalid bids by custodians. 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