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. In a regulatory filing, Vedanta said its buyback offer is deemed to have failed as per the terms of the delisting regulations after promoter Vedanta Resources did not receive the required number of shares to delist the firm.
A large number of unconfirmed bids and some technical glitches in the tender process are likely to have contributed to the failure. 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.
Some bids, however, were pending confirmation from custodians. Reconciliation of data led to the number of shares offered for sale being trimmed to 125.47 crore.
This, Vedanta said, was "less than the minimum number of offshore shares required to be accepted by the acquirers in order for the delisting offer to be successful." "Accordingly, the acquirers will not acquire any equity shares tendered by the public shareholders in the delisting offer and the equity shares of the company will continue to remain listed on the stock exchanges," it said. All equity shares tendered in the delisting offer shall be returned, it added.
Sources privy to the development said Vedanta is now exploring with regulatory authorities if the reverse book building period could be extended by one day. The reverse book building process for public shareholders to tender their shares, which began on October 5, had concluded on October 9.
For successful delisting of the shares, 134.12 crore shares needed to have been validly tendered for the promoter shareholding to cross the 90 per cent shareholding threshold as per regulations. A large number of shares were bid at Rs 320 apiece, a substantial premium to Vedanta's Friday closing price of around Rs 120.
Number of fully paid equity shares in Vedanta, excluding American Depositary Shares (ADS), are 356.10 crore. 90 per cent shares are required to delist the firm, which comes to 320.49 crore. Promoters already have 186.36 crore shares, and they needed an additional 134.12 crore out of the public shareholding of 169.73 crore.
Bankers and promoters had on Friday approached market regulator Securities and Exchange Board of India (SEBI) to grant an extension of one day as retail shareholders faced technical glitches and were unable to submit their bids. In May, the promoters of Vedanta had announced the delisting offer at Rs 87.5 per share.
Later in June, in a special resolution by postal ballot, 93.3 per cent of all shareholders and 84.3 per cent of public shareholders approved delisting of shares of Vedanta. Shares of Vedanta Limited ended at Rs 122.10 per share on Friday, up 3.83 per cent from previous close.
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