[Ayush Gorana is a final-year B.B.A., LLB (Hons.) Student at Gujarat National Law University, Gandhinagar] In a significant regulatory development, SEBI in its board meeting on 27 June 2024 approved amendments to the SEBI (Delisting of Equity Shares) Regulations, 2021, thereby introducing the fixed price method as an alternative to the existing reverse book building (RBB) process for voluntary...
SEBI’s Proposal to Link Voluntary Delisting to a Fixed Price is Meritorious
[Aadya Conjeevaram is a third-year undergraduate student at the West Bengal National University of Juridical Sciences, Kolkata] The Securities and Exchange Board of India (“SEBI”) through a consultation paper (“Consultation Paper”) proposed significant changes to enhance the delisting process. A sub-group, led by Mr. Keki Mistry and comprising members from the Primary Market Advisory Committee...
SEBI’s Takeover Amendment: Hit-and-Miss on Delisting
[Aryan Puri is a 4th-year BBA., LL.B. (Hons.) student at MIT-World Peace University, Faculty of Law, Pune, and Priya Maharishi is a 5th-year B.A., LL.B. (Hons.) student at Jindal Global Law School, Sonipat] On December 6, 2021, the Securities and Exchange Board of India (“SEBI”) amended the SEBI (Substantial Acquisition of Shares and Takeover) Regulation, 2011 (“Takeover Regulations”) to simplify...
Analysis of SEBI’s Proposal on the Delisting Regulations
[Abhinav Gupta and Ayush Khandelwal are final year students at National Law University, Jodhpur] The Securities and Exchange Board of India (“SEBI”) on 20 November 2020 issued a consultation paper to review the SEBI (Delisting of Equity Shares) Regulations, 2009. It aims to enhance disclosures to help investors to make informed decisions, rationalize the timeline under the Delisting Regulations...
SEBI Relaxes Norms for Delisting of a Listed Subsidiary
[Sanjana Arvind Kumar and Divya Rau are final year law students at Jindal Global Law School] The Securities Exchange Board of India (“SEBI”) through, its board meeting, on 29 September 2020, approved an amendment to the SEBI (Delisting of Equity Shares) Regulations, 2009 (“Delisting Regulations”). The amendment aims to simplify the delisting procedure for listed subsidiaries of listed companies...
Opportunistic Delisting in the Times of Covid-19: Need for Checks and Balances
[Tanvi Prabhu is a IV year student and Mansi Mishra a III year student, both at National Law Institute University, Bhopal] With Covid-19 adversely affecting the markets, stocks are trading at multi-year lows. Companies, investors and shareholders are enduring the brunt of a bearish market. But, unsurprisingly, a few companies are embracing this opportunity to exit the stock market completely...
The Delisting Dilemma
When the financial markets are on a decline, company managements tend to utilize it as an opportunity to delist shares from stock exchanges. Not only is there a perception that the depressed market price is far from reflecting the true value of the company, but it also provides the promoters the ability to acquire the shares of the public shareholders at a relatively lesser cost. It is no wonder...
Proposed New Regulatory Framework for Delisting Companies
[Manal Shah a 4th year student pursuing B.A. LL.B. (Hons.) with specialization in Corporate Law from the National University of Advanced Legal Studies, Kochi] Introduction The delisting process is presently regulated by the Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009 (‘Delisting Regulations’). The Securities and Exchange Board of India (‘SEBI’) on 26 July...
SEBI Clarifies Scope of Embargo Against Share Issuances Following Delisting
Companies that are undertaking a delisting of equity shares must be prepared to endure an embargo that would prevent them from listing their shares for a further period of time (five or ten years, depending upon the circumstances). Such a restriction is contained in regulation 30(1) of the SEBI (Delisting of Equity Shares) Regulations, 2009. This is to prevent companies from retreating the...
SEBI Order on Delisting Price
Delisting transactions tend to be sensitive as they underscore the conflicts between controlling shareholders (or promoters) and minority shareholders. The promoters are in a position to delist the company at any time they consider appropriate even though the circumstances may not necessarily favour the minority shareholders. Moreover, due to the information asymmetry between the two groups of...
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