AstraZeneca Pharma Locked In Upper Circuit Post Delisting Announcement
Waseem Ahmad / 03 Mar 2014
The parent company, AstraZeneca Pharmaceutical AB (AZP AB) Sweden, has proposed to voluntary delist its Indian subsidiary from BSE, NSE, and Bangalore Stock Exchange. A meeting is scheduled on 5 March, 2014 to approve the delisting proposal and take other requisite steps.
The stock price of AstraZeneca Pharma India has locked in upper circuit this morning (3 March, 2014). This is after the company announced that its parent company AstraZeneca Pharmaceutical AB (AZP AB) Sweden has proposed to voluntary delist its stock from BSE, NSE, and Bangalore Stock Exchange as these are the stock exchanges where its shares are listed.
The company has scheduled a meeting on 5 March, 2014 to approve the delisting proposal and take other requisite steps. Looking at the shareholding pattern of the company, AZP AB (parent company) is having 75% of the total share of the company while FIIs are holding 16% of total share and 9 % of total share of the company belongs to individual share holders.
As per SEBI guideline, the company requires 90% of total stock for delisting. Promoters are holding 75% of the total stock and need 15% more to carry out the process that can be obtained from FIIs alone. In delisting, offer price are determined by book building method where floor prices are fixed as per SEBI guidelines (but cap has no limit) and shareholders quote the price at which they want to sell it. If the company approves the proposal on Wednesday, we expect that floor price will be near Rs 805-810 and above that the offer price will be discovered.
AstraZeneca India is a multinational company which is engaged in discovery, development and marketing of medicines. The company operates in two business segments, healthcare and clinical study. Healthcare segment is involved in manufacturing and sale of pharma products.
After the announcement of delisting, the company stock is locked at Rs 1110.9 which is 27.84 times of its book value, while industry average comes to 9(x) times. The company performance during the financial year is not satisfactory as its bottomline is in negative from few previous quarters, except a marginal profit of Rs 1.52 crore Q3FY14. We advise the shareholders to tender the stock if the company confirms delisting, but we don't recommend you to buy from current market price.
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