Delisting imminent? A flurry of news has emerged about a company with a market cap of ₹19,000 crore

News Topical, Digital Desk : Delisting means that a company decides to remove its shares from the stock exchange (BSE/NSE). After delisting, the company's shares are no longer traded on the exchange. Retail investors cannot buy or sell shares in the open market. The company comes under the complete control of the promoter or new owner, meaning it changes from "public" to "private."

The real focus on Castrol India shares has now shifted to the possibility of delisting. While Stonepeak's open offer may not have met market expectations in terms of price, the broader strategy behind it is making investors ponder. Especially since Stonepeak has a track record of delistings. The question then is: will Castrol India follow the same path?

What is the connection between the open offer and the delisting?
Stonepeak has launched an open offer of 26% at ₹194.04 per share. The open offer is necessary because, according to SEBI regulations, if a new promoter takes control, it must provide public shareholders with an exit opportunity.

But keep in mind:
This open offer is not a delisting;
it could only be the first step.

Why is LIC so important?
LIC holds about 10% of Castrol India. If delisting occurs in the future, the consent of large investors like LIC will be crucial. Successful delisting without their shares is difficult. Therefore, LIC's decision could change the entire game.

What will be the impact if you buy shares now?
Scenario 1: Delisting does not occur. The stock may remain range-bound. Dividends will continue to be paid (Castrol has a strong dividend record). Operations will remain unaffected. However, expectations of rapid growth will be limited. This means it will remain a dividend-plus stable stock.

Scenario 2: Delisting process begins. This is the most important case. In delisting, the promoter sets the price through reverse book building. Retail investors offer shares at their desired price. If the promoter obtains the required number of shares, the delisting is successful.

Sometimes, the delisting price can even be significantly higher than the market price. However, this is not guaranteed.

What is the biggest risk for a retail investor? If you don't participate in the delisting, or if the promoter doesn't buy enough shares, you could be left with unlisted shares, making them difficult to sell. Liquidity is virtually exhausted, which is the biggest risk of delisting. Let's get to the crux of the matter. Motion Navy Core Stonepeak CP Investment Board has launched an open offer to acquire a 26% stake in Castrol India. The open offer price has been set at ₹194.04 per share. Compared to Wednesday's closing price, this represents a premium of only about 2.5%. This is why the market expected a slightly higher premium, and the lower premium disappointed investors. However, more than the price, the discussion now revolves around its next steps.