This stock hits 20% upper circuit on delisting plan; zooms 34% in six sessions

Shares of BF Investment Ltd. (BFIL), a part of the $2.5 billion Kalyani Group, were locked in the 20% upper circuit after the firm said it would consider delisting of its stock from the bourses during its board meeting on January 4. The share price of the investment company has been rising for the past six sessions and gained 34% in that period, from ₹261.40 on December 23 to ₹350.10 intraday today. In comparison, the BSE benchmark Sensex climbed over 2% during the same period.

Extending its gaining streak, BF Investment share price opened higher and hit a 20% upper circuit of ₹350.10 on the BSE, driven by strong volume trade. As many as 4,623 shares changed hands over the counter as compared to the two-week average volume of 1,401 stocks, while the market capitalisation rose to ₹1,318.74 crore.

The smallcap stock trades near its 52-week high of ₹371.65 touched on January 12, 2022, while it hit a 52-week low of ₹235.75 on June 20, 2022. The counter has seen a growth of 7% in a year, while it surged 34% in six months. In the last one month, the stock has risen 22%, whereas it zoomed over 27% in a week.

In an exchange filing on December 30, BF Investment said the meeting of its board of directors is scheduled on January 4 to consider the proposal for voluntary delisting of the equity shares of the company, having a face value of ₹5 per share. Axis Capital has been appointed as the manager to the offer.

“A meeting of the board of directors of the company is being convened on January 4, 2023, to consider and approve the delisting proposal after discussing and taking into account various factors and the peer review company secretary’s due diligence report; and consider other matters incidental thereto or required in terms of the delisting regulations, including seeking shareholders’ approval, as may be required,” BF Investment said in a BSE filing last Friday.

As per the company, DGM Realties along with Ajinkya Investment and Trading Company and Sundaram Trading and Investment (who are promoter group companies) have expressed their intention to either individually or collectively acquire all the equity shares held by public shareholders and consequently voluntarily delist the equity shares from the stock exchanges.

According to the latest shareholding pattern available on the BSE, promoters hold 2,79,22,726 equity shares aggregating to 74.13% stake in the company, followed by individual investors, who own 13.07% shares. Among others, bodies corporate hold 4.79% stake, LLP (4.39%), Krutadnya Management and Trading Services LLP (4.16 %), and Poonawalla Aviation (3.756%).

The company believes the delisting proposal will provide the public shareholders an opportunity to realise immediate and certain value for their equity shares at a time of elevated market volatility and provide them with immediate liquidity. Besides, the move would enable the acquirer (promoters) to obtain full ownership of the company, which in turn will provide enhanced operational flexibility to manage its business.