InvestorQ : Is it true that promoters still use delisting announcements only to give signal of stocks being underpriced?
Dia Deshpande made post

Is it true that promoters still use delisting announcements only to give signal of stocks being underpriced?

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Sam Eswaran answered.
5 days ago
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That may be a rather unfair generalization but I do take your point that many companies do use buybacks and delisting proposals as a signals that the promoter believes the business is underpriced. This surely has a accretive impact on the stock price.

The big learning from the Vedanta delisting failure was that it was possible to play the price of the stock through management data flows. You don’t know if anyone actually did that but the possibility is bad enough. That is simply evident from the manner in which the price of Vedanta fluctuated wildly.

In fact, this could be one reason why the success ratio has been so low. Apparently, most companies still use delisting proposals to give a signal of the promoter’s intent to support the price in the fervent hope that it offers a floor to the stock price. The new regulations proposed by SEBI will only leave the serious players in the business.

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