Yesterday night, TTK Healthcare announced that its promoters have proposed to acquire all the equity shares held by public shareholders and file for voluntary delisting of its shares from the stock exchanges.
As on date, TT Krishnamachari & Co. holds 67.46% of the paid-up equity shares of the company, while TT Jagannathan holds 5.37% and TT Raghunathan hold 0.27% in the company. Total promoter holding stands at 74.56%.
The rationale for delisting is to provide an exit route for the public shareholders and added that post exit of the human-pharma business of the company, it is left with a host of consumer product lines with single digit margin and in highly competitive environment as well as B to B and white-label businesses that require separate attention and significant cash outflow.
The promoters also perceive that any long term business plan would involve rationalization of certain portfolios, expanding operations into new product categories and new business activities, which may have different risk profiles, funding requirements, longer gestation periods compared to the current risk profile of the company and it would be more prudent to preserve the cash.
Promoters believe that instead of subjecting the public shareholders to uncertainties it would be fair to provide them an exit opportunity through a delisting offer.
The proposed delisting would enable the members of the Promoter Group to obtain full ownership of the Company, which in turn will provide enhanced operational, financial and strategic flexibility.
The company has convened a Board meeting on April 20 to decide on the delisting and few other proposals.
This delisting announcement pushed the stock price through the roof, with the stock hitting a new 52-week high at Rs.1450, up 15.5%.