Essar Oil delisting buzz hots up

MUMBAI: After almost a year of delay, promoters of Essar Oil are set to make an offer to buy back shares of public shareholders for delisting, according to sources. Grapevine has it that they are likely to announce the reverse book-building in the next couple of days. The floor price is speculated to be around Rs 150 per share against the stock's closing price of Rs 209.55 on Thursday.

An email sent to Essar Group spokesman did not elicit a response till the time of going to print. Promoters own 90.5% stake in the company and need around 4.5% from the public investors for the successful delisting. Speculation has it that friendly circles have been accumulating Essar Oil shares in the past one year.

The stock has surged from Rs 95 to Rs 209 in the last one year, outperforming all oil & gas stocks. Earlier this month, Sebi asked Essar Group's promoters Ruias to raise the delisting price for Essar Oil's shareholders, in line with valuations Russian oil gaint Rosneft had offered to pay the promoters to buy a stake in the company.

In July, Shashi and Ravi Ruia agreed to sell 49% in Essar Oil to Rosneft for a price that valued the company at $7-8 billion (Rs 42,00048,000 crore), according to reports. The capital markets regulator said it has directed Essar Oil to increase the delisting price after it received complaints from shareholders.