HSBC Securities and Capital Markets India (HSCI) has proposed to delist the equity shares of IL&FS Investsmart, the broking firm in which it holds a 93.86% stake. Currently, the shares of IL&FS Investsmart are listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE).
HSBC Securities has proposed to delist the company from both the exchanges in accordance with the Securities and Exchange Board of India (SEBI) regulations by purchasing the publicly held equity shares of the company amounting to 4,287,830 shares representing 6.14% of the issued and the paid up equity share capital of the company, IL&FS Investsmart has said in a BSE filling.
HSCI and HSBC Violet Investment (Mauritius) are the promoters of IL&FS Investsmart and together hold 93.86% stake in the company. According to HSCI, owning a full control of IL&FS Investsmart will provide it with an increased operational flexibility to support its business and to meet its client needs.
The board of directors of IL&FS Investsmart, in a board meeting held today, has decided to seek the consent of the equity shareholders of the company through a postal ballot for the delisting of the company, as required by the delisting proposal. The board has also decided to delist the Global Depository Receipts (GDR) from Luxembourg Stock Exchange, since there are no outstanding GDRs as on date.
The proposal suggests that for the delisting of the company, all the equity shareholders of the company would be required to tender their shares to HSCI through the book building process at any price at or above the floor price. The floor price will be determined as per the regulations since the shares of the company are infrequently traded.
The final price payable by HSCI for the acquisition of the shares will be determined in accordance with regulations. It will be up to HSCI’s discretion to accept, reject or increase that price.
In September 2008, HSBC Securities & Capital Markets (HSCI) and HSBC Violet Investments (Mauritius) had acquired 29.35% and 43.85% stakes held by IL&FS and E Trade in IL&FS Investsmart. Post the stake acquisition, HSCI’s total holding in IL&FS Investsmart increased to 50.01%, taking the total stake held by HSBC and HSCI together in the company to 93.86%