In May, the delisting proposal of Elcid Investments Ltd, a promoter entity of paints major Asian Paints Ltd, failed to win the confidence of its minority shareholders. But a month later, a similar proposal by OP Jindal Group company Hexa Tradex Ltd managed to sail through.

Though the outcomes of these two high-profile delisting proposals stand in stark contrast, they share a common thread—pitched battles between promoters and public (minority) shareholders over the fair price of shares.

Prima facie, both companies seem like minnows. The current market capitalisation of Hexa Tradex, which is into the trading of industrial materials, is less than Rs 1,000 crore ($126 million) with a share price of Rs 168 (~$2). The market capitalisation of Elcid Investments, an investment holding firm, is just Rs 5 lakh ($6,300) with a share price of Rs 2 ($0.03).

But size and numbers can be deceptive. Warring minority shareholders have claimed that the book value book value book value The book value of a company, also known as net worth, is its assets minus its outside liabilities. It is essentially the amount of money left on the table after the company pays off its obligations. of each Hexa Tradex share is over Rs 400 ($5), while the intrinsic value intrinsic value intrinsic value Intrinsic value is the anticipated or calculated value of a company. It includes tangible and intangible factors of each Elcid share is, hold your breath, over Rs 6 lakh ($7,500). Elcid holds a 4.3% stake worth about Rs 14,000 crore ($1.76 billion) in Asian Paints. Minority shareholders hold about 37% stake in Hexa and 25% in Elcid.

These battles could have significant ramifications for future delistings—the removal of shares of a listed company from a stock exchange. Delisting can be voluntary—by the company’s promoters or involuntary—on the directions of the market regulator Securities and Exchange Board of India (Sebi). In voluntary delisting, the promoters offer to buy shares from the minority shareholders at a price discovered through a bidding process.

The Covid-19 pandemic-hit two years have seen a record 41 voluntary delisting proposals since June 2020—nearly 30% of the 149 proposals seen since 2010, shows data from market information provider Prime Database. “Many promoters used the stock market volatility opportunistically to try and delist at a low price,” says a market watcher. They and some of the minority shareholders The Ken spoke to for this story requested anonymity as they did not want to be seen commenting on the matter.

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But many proposals fell through.