Wanted to share one more thing that many might have in their mind. Given the momentum in the market, the small caps and midcap have given better return than playing delisting. Yes, true. But this is a hiding place, where returns will only come to those who have patience and appropriate allocation. In my opinion, the market is overheated (by valuation) and you can confirm that through the fact that fund manager (who are long only) are more frequently on the media to justify the India premium valuation. So, if somebody is afraid of the valuations at broader level, properly analysed delisting cases are places to hide and earn an above average return( > 12%). Problem with special situation these days is it has become mainstream. Seth klarman in his book “margin of safety” has clearly stated that as more people chases the special situations, the potential return gets lower. Therefore, it is necessary to be selective even with the special situations. Remember, on the other side of the trade ( Company) there are smarter merchant bakers who will try to control the prices in their favor.
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