Beaten-down stock prices and low valuations have made it attractive for promoters to buy out minority public shareholders.

The latest company to opt for a delisting is Alfa Laval (India) following on the heels of UTV Software Communications, Carol Info Services and Exedy Corp, who are waiting to delist their shares. In November iGATE said it had fixed a floor price of R356.74 a share for delisting Patni from NSE and BSE. A special resolution to delist its shares has been approved by shareholders.

According to a report by ICICIdirect.com, 18 MNCs may be looking to delist their shares. These include Oracle Financial Services, Novartis India, Honeywell Auto, Thomas Cook, Gillette, Blue Dart and 3M India. Interestingly, only eight out of these 18 firms will be left with a surplus on buying the shares at the current market price or at a 10% premium.

According to the brokerage, fundamentally strong multinational companies (MNCs) may not have the inclination to increase their public holding and may resort to delisting to have better flexibility in taking business decisions.

?The case for delisting becomes stronger in the current weak trend prevailing in the equity markets, which has led to a substantial fall in stock prices, providing an opportunity for such corporates to buy out the remaining stake with the public at lower valuations,? said the report.

The report further added that the chances of success for delisting were higher now as public shareholders appear more willing now to a particular stock even at a marginal premium to current stock prices. Market participants said that it would be unwise to delist if the cash flow of the company comes under strain.

As per guidelines for minimum public shareholding for all listed corporates, all private sector listed corporates must have at least 25% public holding while listed PSUs should maintain a minimum public holding of at least 10%. The deadline for companies to achieve the stated level of public holding is June 2013.

Delisting has had a dismal track record in India, with only a handful of companies managing to delist in the past few years. Since 2002, just about 50 companies have successfully delisted, BSE data shows. Delisting is not easy as the company must get approval of 2/3rd of the shareholders through a postal ballet, establish an acceptable price through reverse book-building and increase the holding to the required threshold.