De – listing of Listed company
What is delisting?
Listed company
removed from stock
exchange
Delisting of ‘public
company’
Shares no longer
traded on exchange
i.e. NSE, BSE
Delisting process
governed by SEBI
Types of Delisting
1.)
Voluntary
Delisting
Delisting from
all exchanges
2.)
Compulsory
Delisting
Delisting from one
of the exchanges
only
Requirements of
SEBI not
complied with
Exit
Opportuning
No Exit
Opportunity
When Reverse Book Building is required?
1.)
Voluntary delisting
Cases that require to follow the Reverse
Book building process
2.)
Public shareholding in company
falls below the minimum limit
3.)
Compulsory delisting
Reverse Book Building Process
Appointment of :
1.) Merchant Banker
1.) Announcement by
Merchant Banker & promoter
2.) Trading member for placing
bids on the online electronic
system
2.) Letter of offer and bidding
form to the public
shareholders
Placing of bids by shareholders
(equal or above floor price)
•Final buy back price is
determined after the closure
of the offer.
1.) Order placing by
shareholders
2.) Deposit of securities with
trading members
Acceptance of final price by
promoter +
Announcement to the
shareholders by the merchant
bankers.
Criteria to determine the Floor Price in
delisting
• Average of (opening & closing) 26 weeks traded quoted price
or
• Average of preceding 2 weeks opening and closing traded price
(from the date of announcement)
Determination of Final Offer Price
Price at which maximum number of shares are offered
For example
• If total of 500 shareholders holding 10 lakhs shares place bids at Rs.
400 per share
• If total of 5 shareholders holding 30 lakhs shares place bids at Rs. 425
per share,
Rs. 425 would be selected as the offer price