March 21, 2022
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Sintex Delisting ??!!?? What to Do??
The share of Sintex ltd has hit lower circuit on Monday, 21st March 2022 and many investors who trusted Reliance management and had acquired the shares of Sintex since it is being taken over by Reliance and group of ARC with the hope that Reliance management will turnarount the company and they will earn handsome profits , are disappointed.
These investors are repenting for trusting Reliance management which has decided to reduce the exisiting share capital of Sintex ltd to zero and the company will be delisted from the exchanges. This is real blow for the retail investors for trusting Reliance management.
Chanakya discussed this issue with leading fund houses and legal experts and they have indicated that even in the case of Alok Industries which was taken over by Reliance Group in the year, the scrip was delisted and later on re-listed.
Case of Alok industries:22 November 2019,The National Company Law Appellate Tribunal(NCLAT) has allowed Reliance Industries to delist the shares of Alok Industries, which it had acquired in insolvency process. In view of face value reduction, the delisting was allowed. The scrip of Alok Industries later on 19th February 2020 on Wednesday, relisted on the bourses after capital reduction . They were suspended from trading for capital reorganisation from January 30, 2020.
The reorganisation resulted in the face value of the shares being reduced from Rs 10 to Re 1. This effectively meant that a shareholder on the record date would post this reorganisation, continue to hold the same number of shares and the equity capital of the company would be reduced by 90 per cent.
The reorganised share capital of the company stood revised to 137,73,17,895 shares of Re 1 face value totalling Rs 137.73 crore against the identical number of shares of Rs 10 face value totalling Rs 1,377.31 crore.
so….. the alternatives with the Retail investors of Sintex ltd At this juncture are
1) whether the investors may sell the shares of Sintex ltd and book losses OR
2) They may retain their shares with the hope that at later date, the Reliance management will relist the share( as done in alok) and they may make bumper gains with financial-might of Reliance Industrires. In this second option, the shareholders donot know when the relisting will be done. so that is huge uncertainties and blockage of funds.
