The shares of BF Investment soared 75.34% from December 23, 2022, to January 04, 2023, as its board was mulling the company’s voluntary delisting. They reached a high of ₹ 462.65 apiece.
The company’s shares on Thursday, January 05, 2023, hit a 10% lower circuit and were locked at ₹ 412.55 apiece on the National Stock Exchange (NSE) and ₹ 413.65 apiece on the Bombay Stock Exchange (BSE).
The exchanges had asked for clarification about the reason behind the windfall increase in the company’s share price over a short period of time.
The company clarified saying that it is in receipt of an initial public announcement dated December 30, 2022 made by DGM Realties Private Limited, Ajinkya Investment and Trading Company and Sundaram Trading and Investment Private Limited who are members of the promoter and promoter group of BF Investment Limited. These parties through Axis Capital Limited, Manager to the Offer, had expressed their intention to voluntarily delist the equity shares of the Company (“Initial Public Announcement”).
In addition, the company had appointed SVD & Associates, a peer review company secretary, to carry out due diligence and other applicable provisions of the Delisting Regulations. A board meeting was held on January 04, 2023, to approve or reject the proposal.
The company in an exchange filing said that post the due diligence report issued and submitted by SVD & Associates, it found that one of the members of the promoter and promoter group of the company had sold 400 shares of the company on June 29, 2022.
Once the initial public announcement is made, a due diligence exercise is conducted, during which the beneficiary position data (“BENPOS”) of the company is checked. Since one of the members of the promoter and promoter group sold the shares less than six months ago, they cannot propose the delisting of the company.
In view of the above and as a matter of abundant caution and good governance, the Delisting Proposal was not approved by the Board to ensure compliance with Regulation 4(2) of the Delisting Regulations.
According to Regulation 4(2) of the Delisting Regulations of the Securities and Exchange Board of India (SEBI), no acquirer, including the promoters and the members of the promoter group who has sold any equity share(s) of the company during the period of six months, prior to the date of the initial public announcement, can propose delisting of equity shares of that company.
Written by Simran Bafna
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