Atlas Copco delisting offers exit opportunity for investors

Construction equipment maker Atlas Copco India is making appreciable gains on the bourses  following a delisting offer of Rs2,250 a share, which, according to analysts is attractively priced.

Atlas Copco AB, the Swedish promoter of Atlas Copco India Ltd, aims to buy back the remaining 16.23 per cent public stake at a price of Rs2,250 per piece. The delisting offer will open on 7 March and close on 11March.

According to analysts, the offer is attractively priced by the promoters. They say it offer a good for retail investors to exit the company.

The Swedish parent holds an 83.77-per cent stake in the Indian unit. On conclusion, the offer would see the company's shares delisted from the Bombay Stock Exchange and Pune Stock Exchange.

With their 83.7-per cent shareholding which translates to 1.89 crore shares, the promoters of the company need to mop up at least half of the remaining 36.6 lakh equity shares for the delisting to go through.

The company's performance in 2010 has been quite robust, but analysts say the fundamentals do not justify the current high valuation, which has been sustained by the promoters' willingness to accept shares at Rs2,250, a premium of 58 per cent to the floor price of Rs1,426 per share. The actual price for delisting would be discovered through a reverse book building process between 7March and 11March according to analysts.