DELISTING. IN
What How When
 SEBI(DELISTING OF EQUITY SHARES)
REGULATIONS, 2009
 SCRA[ SECURITIES CONTRACT(
REGULATION ACT) 1956]
 LISTING AGREEMENT
 COMPANIES ACT,1956
 SEBI ( SUBSTANTIAL ACQUISITION OF
SHARES AND TAKEOVER) REGULATION,
1997
• Delisting
Listing means admission of a
Company’s securities to the trading
To be able to understand the
meaning of delisting, one has to
first understand the meaning of
the word “Listing”.
platform of a Stock Exchange, so as
to provide marketability and
liquidity to the security holders.
• Listing
 “Delisting” is totally the reverse of listing. To delist
means permanent removal of securities of a listed
company from a stock exchange. As a consequence of
delisting, the securities of that company would no
longer be tradeable at that stock exchange.
JOURNEY FROM GUIDELINES
TO REGULATIONS
………
 SEBI Delisting Guidelines, 1998.
 SEBI Delisting Guidelines, 2003.
 SEBI (Delisting of Equity Shares )
Regulations, 2009.
 Public shareholders have been defined as the holders of
equity shares other than the
 a) Promoters and
 b) holders of depository receipts issued overseas against
underlying shares.
 Not be applicable to sick companies
 The companies cannot delist their securities from the
Exchanges pursuant to buyback and preferential allotment.
 No shareholders approval, in case the company continues
to remain listed at any of the exchanges having Nationwide
trading terminal i.e. BSE and/ or NSE or any other
Exchange specified in this behalf.
 The concept of Specified Date has been introduced, which shall
not be later than 30 working days from the date of the Public
Announcement.
 The special resolution passed for the delisting giving exit option
to the shareholders will be valid for a period of 1 year within
which the final application will be required to be made to the
exchange for delisting.
 Special Resolution by way of Postal Ballot
 Successful Exit Offer : Under the Regulations, to get
delisted, post offer, the Promoter holding should reach the
higher of the following:
 90% of total issued shares of that class; or
 (pre offer promoter holding +50% of the Offer Size),
otherwise the offer shall be deemed to have failed.
Promoters’ option of not accepting the Offer Price
Promoters/ PAC not allowed to participation in bidding:
Guidelines,2003
Definition- The Public
shareholding is the
shareholding in a company
other than by the Promoters,
Persons Acting in concert
with the Promoter
Inapplicability- Not
mentioned exclusively and
separately.
Regulations.,2009
Definition- Along with the
Promoters, Persons Acting in
concert with the Promoter ,
holders of Depositors receipts
and the custodian thereof are
also Included
Inapplicability- Separate section is
made. The exemption is available to
the companies which have been
declared sick & their reconstruction
scheme provides the delisting
including the provisions of the exit
option to the shareholders.
Guidelines,2003
Regulations.,2009
Shareholders Resolution Special resolution to be
passed through the
shareholders is compulsory.
Shareholders Resolution -Now the
requirement of special resolution for the
delisting without Exit route is deleted.
Only public announcement and the
disclosure in the first annual report after
delisting will suffice the requirement.
No time limit was prescribed
for the exchanges for disposal
of the Delisting application
filed by the companies.
A 30 days time period after the receipt
of Application complete in all respect,
given to the exchanges for disposing of
the application of delisting.
Guidelines,2003
Regulations.,2009
Small Companies-No
special provisions are
there for the small
companies.
Small Companies-Special
provisions under the separate
section be given for the small
companies and winding up
companies.
Reinstatement of
securities- The
companies can not be
relisted at the exchange for
a period of 2 years from
the period of delisting.
Reinstatement of securities- The
companies delisted voluntarily can
not be relisted for a period 5 years
and the companies compulsorily
delisted can not be relisted for a
period of 10 years from the date of
delisting
Delisting
Compulsory
Delisting
Voluntary
Delisting
Voluntary
delisting from all
the exchanges.
Compulsory
Delisting
Delisting
Voluntary
delisting
Voluntary
delisting from
few exchanges
but remains
listed on at least
one stock
exchange having
nation wide
terminals
Small Company
(whether listed at
any of the
Exchanges)
Exit opportunity
No exit
opportunity
No Bidding, but
exit opportunity is
there
 A recognized stock exchange may, by order, delist any
equity shares of a company on any ground prescribed in the
rules
made
under
section
Contracts (Regulation) Act, 1956
21A
of
the
Securities
 Decision by panel of experts after considering the various
parameters given in the regulations.
 Public notice by the exchange for inviting the
representation by the aggrieved persons.
 Determination of exit price by the independent valuer
appointed by the concerned stock exchange.
 No requirement of going through the reverse book
building process.
 Acquisition of shares by the promoters at fair value.
 Where a company has been compulsorily delisted, the
company itself, its whole time directors, its promoters and
the companies which are promoted by any of them shall
not directly or indirectly access the securities market or
seek listing for any equity shares for a period of ten years
from the date of such delisting
 The recognized stock exchange can file prosecutions under
relevant provisions of the Securities Contracts (Regulation)
Act, 1956 or any other law for the time being in force
against identifiable promoters and directors of the
company for the alleged non-compliances.
 The recognized stock exchange can also file a petition for
winding up the company under section 433 of the
Companies Act, 1956 (1 of 1956) or make a request to the
Registrar of Companies to strike off the name of the
company from the register under section 560 of the said
Act.
 Voluntary delisting : VOLUNTARY DELISTING FROM ALL THE EXCHANGES
 VOLUNTARY DELISTING FROM FEW EXCHANGES BUT
REMAINS LISTED ON AT LEAST ONE STOCK EXCHANGE
HAVING NATION WIDE TERMINALS
 VOLUNTARY DELISTING BY THE SMALL COMPANIES
 VOLUNTARY DELISTING FROM ALL THE EXCHANGES
 If after the proposed delisting, the equity shares would not
remain listed on any recognized stock exchange having
nation wide trading terminals, Exit Opportunity shall be
given to all the public shareholders holding the equity
shares sought to be delisted. (Regulation 6 (b))

The special resolution to be passed by postal
ballot shall be acted upon if and only if the votes
cast by public shareholders in favour of the
proposal amount to at least two times the
number of votes cast by public shareholders
against it.
 The company shall obtain in principle approval
from the concerned stock exchange for the
proposed delisting of its equity shares .

 The promoter appoint a merchant banker.
 Public announcement by the promoters.
 Invitation of bids from the public shareholders through
letter of offer for determination of final price [ Reverse
Book Building]
 The final offer price shall be determined as the price at
which the maximum number of equity shares is tendered
by the public shareholders.
 The offer shall remain open for a minimum period of three
working days and a maximum period of five working days
during which the public shareholders may tender their bids
 Post offer Promoter shareholding should reach to
either 90% of total paid up capital or minimum 50% of
the public shareholding tendered through offer
whichever is high.
 The final price need not to be accepted by the
promoters.
 Remaining public shareholder may tender their
shares to the promoter upto a period of one year
from the date of delisting
 Where the equity shares are frequently traded in all
the recognized stock exchanges where they are listed,
the fair price shall be higher of the following:
 A.) the average of the weekly high and low of the closing
prices of the equity shares of the company during the
twenty six weeks .
 OR
 B.) two weeks preceding the date on which the recognized
stock exchanges were notified of the board meeting in
which the delisting proposal was considered,

 VOLUNTARY DELISTING FROM FEW
EXCHANGES BUT REMAIN LISTED AT ONE
STOCK EXCHANGE HAVING NATION WIDE
TRADING TERMINAL
 If after the proposed delisting from any one or more
recognized stock exchanges, the equity shares would
remain listed on any recognized stock exchange which has
nationwide trading terminals, No Exit Opportunity needs
to be given to the public shareholders. (Section 6 (a))
 No need to pass Special resolution by members.
 The company has to give a public notice of the
proposed delisting.
 The company shall disclose the fact of the delisting in the
first annual report after delisting.
Definition
 A company having paid-up capital of upto one Crore rupees
and its equity shares were not traded on any exchange in
the one year immediately preceding the date of decision of
delisting; OR (Regulation 27 (1))
 A company having upto 300 public shareholders and the
paid-up value of the shares held by such shareholders is
upto one Crore rupees. (Regulation 27 (2))
 The special resolution through postal ballot and be acted upon
if and only if the votes cast by public shareholders in favour of
the proposal amount to at least two times the number of votes
cast by public shareholders against it.
 The promoters shall determine the exit price in consultation
with the Merchant Banker.
 The company shall obtain in principle approval from the
concerned stock exchange for the proposed delisting of its
equity shares .
 90% public shareholders should give their consent for delisting
of the equity shares by not following the reverse book building
process.
 The shareholders should be given a option to remain the
shareholders even if the company gets delisted.
Cooling period: The company that has voluntarily delisted its securities can relist
its securities only after a period of 5 years.
 The company that has been compulsory delisted by the exchange
can relist its securities only after a period of 10 years.
Relisting of sick companies

In case of Delisted companies who were sick in the past, can be
given opportunity of listing through Restructuring scheme passed
by BIFR.
 The sick companies are exempted from the provision of cooling
period.
 Non Payment to the shareholders
 No check by the regulatory authorities on whether the payment
has been made to the shareholders or not in case of compulsory
delisting.
 It does not mention the penalties/ consequences in case of
defaulting promoters in making the payment of the fixed fair
value to the public shareholders.
 Applicability of regulation 8 in case of small companies
 The extent of the applicability of regulation 8 is not clearly
defined in case of delisting by small companies.
 No time period for the acquisition of shares from the public
shareholders has been prescribed in case of compulsory
delisting.