joint ventures, 100% subsidiaries,f MNCs Indian operations,30 MNCs, Indian operations, Indian stock
market, Delisting companies, policy makers, institutional and
investors,debatable issue, contrasting viewpoints, paper discusses,
the reasons for MNCs, Indian investors. especially minority investors are
criticizing such a move. In light of some of the criticisms leveled against MNCs, this paper discusses various
dimensions of delisting/buying out of promoters stake/various rounds of open offers of two companies—Otis
India Company Ltd., and Carrier Aircon Ltd., both belonging to one MNC parent. This paper analyzes
whether both companies gave bleak picture of their fundamentals which could have a bearing on stock price
movement in the bourse so that enabling the MNC parent to come out with an “open-offer price-at-a-hugepremium-
to-prevailing-market-price” as alleged by Indian shareholders. Comparison of various rounds of
open offers for both companies has also been done to find out whether the parent MNC followed a similar
strategy as far as timing, pricing of open offers, and the modalities of delisting are concerned. This paper
also discusses issues like whether delisting of Indian operation was part of long-term strategy of the parent
or not, and whether the parent MNC has been able to achieve objectives of delisting the Indian operations.
Delisting of Indian operation from Indian bourses by MNC parents has gathered
momentum since 1998. Till date, close to 30 MNCs have already delisted their
operations in India and are operating as 100% subsidiary. Another 20 to 25 are
in various stages of delisting process i.e., negotiating with the Indian joint venture partners
to buy out their stake, getting permission from FIPB, increasing their shareholding either
through open market operations or through various rounds of open offers. |
