Food stock jumps 85% after the company announced the proposal to delist

The shares of Crax maker- DFM Foods surged 65.87% in the past month and the shares are currently trading at ₹ 363.85 apiece. This happened after the company announced the proposal to delist its equity shares from the bourses.

The company’s share price increased from ₹218.55 to the current levels. If an investor would have invested ₹ 1,00,000 in the company’s shares a month ago, the value of their holdings would have been ₹ 1,65,870 today!

In an exchange filing, Advent expressed AI Global’s intention to acquire all the equity shares that are held by public shareholders, either individually or collectively, as the case may be, and consequently voluntarily delist the equity shares from the stock exchanges. JM Financial Limited is the manager for the delisting of its shares.

The company said that the proposed delisting would enable the acquirer (AI Global Investments) along with members of the promoter and promoter group of DFM Foods to obtain full ownership of the company which will in turn provide increased operational flexibility to support the DFM Food’s business and make investments in it, as it explained the rationale behind the delisting proposal.

This delisting proposal will provide the public shareholders with an opportunity to realise immediate and certain value for their equity share and also the delisting of equity shares. Further, it will result in the reduction of the ongoing substantial compliance costs like the costs associated with the listing of equity shares such as annual listing fees and fees payable to share transfer agents or such other expenses required to be incurred as per the applicable securities law.

DFM Foods manufactures and sells packaged snacks. It manufactures Crax, which was one of India’s first successful packaged snacks. Advent International, a US-based private equity firm acquired a majority stake in DFM Foods Ltd. in 2019.

Written by Simran Bafna

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