Enthusiasm to invest in shares of public companies
that can go private matches a trend seen in Singapore in recent years. The premium for privatisations and takeovers in the city-state averaged about 15 per cent between 2017 and July 2019, according to the data from DBS Bank. The strategy was earlier seen in India after the global financial crisis, and, in 2009, at least one local fund manager opened a fund to buy shares in companies
seen to have a high likelihood of delisting.
“I have some stocks that are bets on delisting
due to their cash-rich foreign parents,” said Chokkalingam G, head of investment advisory at Equinomics Research & Advisory, adding, “A fall in stock valuations and the rupee is underpinning investments in the likely delisting candidates.”
Billionaire Anil Agarwal’s Vedanta Resources
last month was the first to propose delisting of its India listed Vedanta. Its shares had collapsed about 40 per cent between January 1 through May 12 — the day before Adani Power lost 39 per cent of its market value so far in 2020.
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