Can surrender your shares up to 29 September 2021 to the co.at final delisting price. I think they are gonna sell this to someone at higher prices that’s why I have not surrendered a few shares , may be being greedy but want to play the game promoters are playing.
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Quite possible. Also some like societe Gen. who bought a sizeable chunk of shares 2 days back could be for pure arbitrage. submitting to co. later at the discovered price
Anyone with clarity on taxation? How will the proceeds be taxed at the hands of the share holders? Will it be different if sold at the time of de-listing (STT paid) compared to shares being tendered to the Co at the discovered price after the bidding process is over (STT not paid)?
Appreciate feedback.
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https://www.incometaxindia.gov.in/Tutorials/14-%20STCG.pdf
Please refer to the link. STT does not seem like a prime criteria.
With effect from Assessment Year 2017-18, benefit of concessional tax rate of 15% shall
be available even where STT is not paid, provided that
- transaction is undertaken on a recognised stock exchange located in any
International Financial Service Centre, and - consideration is paid or payable in foreign currency
Short Term Capital Gain is divided into two parts
1.STT Paid on Listed instruments and shares traded in International Market will be taxed u/s 111A @15%. It is an Exclusive and Specific section for listed instruments where STT is paid.
2. If STT is not paid then the transaction is treated as normal Short Term Capital Gain and it is taxed under normal slab rate in which an individual falls for that particular assessment year.
At the time of Delisting, STT is not paid and hence it will be taxed at individual slab rate .
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@Pranshinv, You are correct. As while delisting, it is not the Co. that is buying back the shares, the benefit of nil taxation at shareholders hands will not be applicable.
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Bottomline what I meant is that STT may not drive the decision as a standalone criteria. If the delisting is through the exchange / market, then we could argue that preferential rates could apply. The document attached in earlier post clarifies that point.
“22.3. The present delisting offer will be carried out through domestic stock exchange. Therefore, STT will be collected by the stock exchange and deducted from the amount of consideration payable to the shareholder.”
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SO finally our thesis played out well and delisting gains are equally to what we initially expected. Congrats those who believed and participated in the story. Will be back with another story if I Find one.
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Grateful to @Naresh, who bought it to the notice of the community and constantly kept the thread updated and patiently answered all the queries raised.
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Well done Naresh. It was a good journey. why not take thelead in next delisting oppurtunities now. some other delistings are currently in progress
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Congratulations to you and entire ValuePickr community! Would have been difficult without the discussions with everyone
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Received delisting contract note from my broker(zerodha). STT is deducted.
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@Rafi_Syed Can you please explain what the above article contains? Only premium users can access it.
congratulations on identifying the hexaware story early on.
what do you think of xchanging technologies delisting
i have taken a minor position at around 66, now the price is 95
company has an ebit margin of 43% and pat margin is 35% this quarter
now owned by dxc technology which in turn is an hp owned company
Great entry Sir! I couldn’t play as whole concentration was on Hexa. The expected delisting price of exchanging is around 105-110. Since at this price we don’t have margin of safety, not playing. If the price comes around 75 odd level, this will be good bet. Your price offers margin of safety. Well played.
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There was a LinkedIn article where the writer justified the relisting target of 250 based in certain logics. Need to find that as I didn’t save that. The problem with Vedanta and Adani Power is higher capital requirement to delist which doesn’t give comfort to play delisting situation.
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