Elcid Investments may look like yet another penny stock. Its shares are trading at Rs 2 ($0.03) a pop, and its market capitalisation is a laughable Rs 5 lakh ($6,280). But these numbers belie the goldmine Elcid is sitting on: a 4.3% stake in paints major Asian Paints Ltd that is worth—wait for it—Rs 14,200 crore ($1.8 billion). This investment is the reason why minority shareholders think each share of Elcid is worth Rs 6.3 lakh (~$8,000), four times what Elcid's promoters are willing to offer to take the company private. The pitched battle between the two camps best reflects the tricky territory that is delisting. “Even the biggest of promoters rarely let go of any opportunity to penny-pinch,” says an Elcid shareholder who led a crusade of sorts against the price offered in the delisting. One in every three voluntary-delisting proposals since 2010 has been in the past couple of years. Promoters have used the stock-market volatility to buy back their companies on the cheap. But most of them haven't succeeded. And even when they do, as in the case of Hexa Tradex, an OP Jindal Group company, there are allegations of minority investors being shortchanged. In our meticulously analysed article today, my team and contributor take a long, hard look at what it would take to fix the power imbalance between promoters and minority shareholders.
