Vedanta Resources, in a bid to temper floor price expectations, has said that the book value of the equity shares of its Indian arm is Rs 89.38 per share.

According to brokerages, this is at a discount of around 40 per cent to the calculated book value of Vedanta Ltd of Rs 147 per share.

Book value is calculated as net worth of the company divided by the total number of outstanding equity shares.

In May, Anil Agarwal-led Vedanta Resources had announced its plans to voluntary delist the equity shares of Vedanta Ltd.

“We would like to inform that the book value of Vedanta Ltd’s equity shares, according to delisting regulations (book value) for the year ended March 31, 2020, is Rs 89.38 per share, as extracted from the audited consolidated financial statements of Vedanta Ltd,” Vedanta Resources said in a statement on Wednesday.

Book value signifies the intrinsic value of the company’s shares as on a particular date. It, therefore, sets an indicative floor price for the reverse book building process.

Book building is a mechanism where companies which are looking at de-listing collect offers from the shareholders at various prices, which are above or equal to the floor price.

The price at which equity shares through eligible bids take promoter holdings to 90 per cent is determined as the final exit price. The promoter has the option to accept or reject the offer or even make a counter offer after discovery of the final exit offer price.

A counter offer has to be done within two working days from the discovery of the final exit offer price.

If the delisting offer is accepted, the promoter will have to pay the requisite consideration to shareholders within ten working days of the closure of the bidding period.