M&A Critique
Delisting-Elcid-Investment

ELCID DELISTING: At a FAIR PRICE?

Elcid Investments Limited (“the Company” or “EIL”) is a non-banking financial company (NBFC) registered with the Reserve Bank of India (RBI) under the category of Investment Company. The Company’s activities primarily comprise of investing in listed and unlisted equity shares, debt instruments of companies and in mutual funds.

As on 31st March 2022, the Company along with its wholly-owned subsidiaries is holding 4.23% Equity shares of Asian Paints Limited having fair value of more than Rs. 12,000 Crores. EIL is also the promoter of Asian Paints Limited. Promoters holding in EIL is 74.98% out of which Vakil Family holds 74.88% who are also the founders and promoters of Asian Paints Limited.

Shareholding pattern as on 31st March 2022

Category No. of Shareholders % of Shareholding
Promoters & Promoter Group 5 74.98
Public 271 25.02
Total 276 100

The company has paid-up capital of Rs.20 Lakhs only, divided into 2 Lakhs equity shares of Rs.10 Each. Shares of the EIL were traded last time on 14th September 2021 on BSE.

Delisting offer by the Promoters

On 19th March 2022, promoters viz. Dipika Chemicals Private Limited, Dipika Vakil, Varun Vakil and Amar Vakil made an initial public announcement to the stock exchange pursuant to Regulation 8 of Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2021, (“Delisting Regulations”) expressing the intention to acquire all the equity shares held by public shareholders and consequently voluntary delist the equity shares of Elcid Investments Limited from the stock exchange from BSE with Reverse Book Building. Even though the intention of the promoters is to acquire “All” i.e., 100% shares held by public shareholders, the same is not condition precedent for the delisting.

After making Initial Public Announcement, in accordance with Regulation 10 of Delisting Regulations, the Board of Directors of EIL in their meeting held on 28th March 2022 approved the proposal for delisting stating and now the company is seeking the consent of the shareholders through postal ballot/e-voting in accordance with Regulation 11 of Delisting Regulations.

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Sanket Joshi