Regulation 19 (1) of the Delisting Regulations noted above is that either they did not get enough shares, or the Promoter got enough shares and rejected the price. In this case, as the next page of the announcement shows, they did not get enough shares. The required number of shares to reach 90% to trigger a Discovered Price was 1.341bn but the number of confirmed bid shares submitted was 1.2547bn shares. An additional 123.19mm shares had been submitted, taking the total to 1.378bn, which would have passed the hurdle, but those shares were not confirmed by bankers and custodians before the deadline.
It was reported that the bankers DAM Capital and JP Morgan were seeking to extend the Delisting Offer for an extra day because of both the BSE outage Friday and the matter of some brokers only allowing bids at the Floor Price (reported Thursday). The BSE had already extended the hours of the Delisting Offer to 7pm Indian Standard Time, and this was seen to be helping. Apparently the bankers were not successful at the time.
This will likely cause an unwind. This will hurt the price.
An article put out by PTI (Press Trust of India) and syndicated across severalnewspapers has a quote saying…
Sources privy to the development said Vedanta is now exploring with regulatory authorities if the reverse book building period could be extended by one day.
There is still a chance, and while I thought VEDR should have had the extra day, I do not know that SEBI will give them the extra day now that the result has been announced. I would be surprised if they get the extra day.
More about the size of the unwind, the “fair” price vs comps, and possible mitigants below the fold.
Insights previously published in the timeline of the Vedanta Delisting Offer are listed below.