Prabhat Dairy Ltd shares plunged as much as 10% in early trade on Monday, i.e. 16 September, after the company’s board approved delisting of shares at a lower-than-expected price.
Prabhat Dairy announced that it intended to acquire about 48 million equity shares, or 49.9% stake in the company, from the shareholders at a floor price of Rs 63.77 apiece, which is 20% lower than the stock’s last closing price.
At 10:58 am, shares of Prabhat Dairy were trading at Rs 76.15, down 4.1%, after hitting an intra-day low of Rs 71.40. The stock had closed Friday’s session at Rs 79.40. Notably, the stock has risen over 23% in the last one month in anticipation of delisting announcement.
Prabhat Dairy, in a regulatory filing to stock exchanges, said: “The acquirers expressed their intention to acquire 4,87,40,547 fully paid-up equity shares of the company representing 49.9% of the paid-up equity share capital of the company that are presently held by the public shareholders of the company and consequently voluntarily delist the equity shares of the company from the stock exchanges.“
The company added that it has recently completed the sale of its dairy business undertaking by way of slump sale along with the sale of its 100% shareholding in Sunfresh Agro Industries (step-down subsidiary of company) pursuant to a share purchase agreement to the Tirumala Milk Products, a wholly-owned subsidiary of French dairy multinational Groupe Lactaiis.
Prabhat Dairy now no longer operates in the core business, which contributed majorly to the revenues and profits.