Hexaware Technologies Gets Shareholder Approval For Delisting
The information technology firm has received approval from a majority of its shareholders to delist from the exchanges.
Hexaware Technologies Ltd. has received approval from a majority of its shareholders to delist from the exchanges.
The information technology firm informed the exchanges on Monday that nearly 92.64% of its public institutional investors and and 18.97% of its non-institutional shareholders voted on the resolution. Among them, 95.69% of retail shareholders and 60.85% of non-institutional shareholders favoured the move to take the company private.
Hexaware’s promoter Baring Private Equity Asia, which holds 62.34% stake in the company, had announced the move on June 4. It can now go ahead with the delisting process. Public shareholders held the remaining 37.66% stake in the company as of June, according to exchange data.
The indicative offer price for de-listing made by the promoter group on June 4 was Rs 285 per share—a discount of 29% to its closing price on Aug. 10. Baring PE Asia might have to raise the offer price to Rs 400 per share to get investor interest in the delisting process, Madhu Babu, analyst at Centrum Broking, wrote in a recent note.
The main objective of the delisting is to obtain full ownership of the company which will help in cost savings and allow the management to dedicate more time to focus on the company’s business, the company said in a statement.
Final delisting prices are determined by a reverse book-building process and require approval from at least 90% of shareholders, according to regulations of the Securities and Exchange Board of India. However, recent changes to delisting rules allow the acquirer to make a counter offer if the price discovered during the reverse book-building isn’t acceptable.
Since June 4, shares of Hexaware Technologies have risen by nearly 55%, while the Nifty IT Index gained 24%.