SEBI (Delisting of Equity

Lesson 8 Shares) Regulations, 2021

Key Concepts One Learning Objectives Regulatory
Should Know Framework
To understand:
• Bidding
• Meaning of Delisting • SEBI (Delisting of Equity
Mechanism
Shares) Regulations, 2021
• Reverse Book • Types of Delisting
Building • Delisting Regulations at
• Exit Opportunity various points of time in
2003, 2009 and the latest
• Discovered Price amendment in 2021.
• Escrow Account • Various requirements to be
• Counter Offer complied for delisting.
• Initial Public • Various provisions of
Announcement delisting.
• Detailed Public • Conditions and procedure
Announcement for delisting where exit
opportunity is required and
• Floor Price not required.
• Innovators • Consequences of delisting in
Growth Platform case of compulsory delisting.
• Small Company • Special powers of SEBI.

Lesson Outline
• Introduction • Compulsory Delisting
• Genesis • Special provisions for Small
Companies
• Regulatory Framework of
SEBI (Delisting of Equity • Special provisions for
Shares) Regulations, 2021 companies listed on
Innovators Growth Platform
• Applicability
• Powers of SEBI
• Non-Applicability
• Role of Company Secretary
• Conditions for delisting in delisting
• Voluntary delisting • LESSON ROUND-UP
• Conditions and Procedure • GLOSSARY
for delisting where exit
opportunity is not required • TEST YOURSELF
• LIST OF FURTHER READINGS
• Conditions and Procedure
for delisting where exit • OTHER REFERENCES
opportunity is required
 246 Lesson 8 • EP-SLCM

INTRODUCTION
Listing means admission of a Company’s securities to the trading platform of a Stock Exchange, so as to provide
marketability and liquidity to the security holders.

“Delisting” which is totally the reverse of listing denotes removal of the securities of a listed company from the
platform of Stock Exchange. Delisting is different from suspension or withdrawal of admission to dealings of
listed securities, which is for a limited period.
The Companies choose to list themselves to grab the advantages of listing viz; lower cost of capital, greater
shareholder base, liquidity in trading of shares, prestige etc. But the companies need to be contended that the
„‡‡ϐ‹–•‘ˆŽ‹•–‹‰‘—–™‡‹‰Š–Š‡Ž‹•–‹‰ ‘•–•ǡ–Š‡ ‘’Ž‹ƒ ‡”‡“—‹”‡‡–•†‘‘–‘˜‡”„—”†‡–Š‡ ‘’ƒ‹‡•ƒ††‘
not expose them to disciplinary actions.

Whereas, ‘Suspension’ of trading in securities means that no trade can take place in the securities of the company
suspended for a temporary period. Suspension is not done at the instance of company but it is action taken by the
Stock Exchanges against the company, generally for non-compliance of listing conditions as stipulated under the
SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (LODR Regulations) for which the Stock
‡š Šƒ‰‡• ƒ› ‹’‘•‡ ϐ‹‡• ‘” ˆ”‡‡œ‡ ’”‘‘–‡”Ȁ’”‘‘–‡” ‰”‘—’ Š‘Ž†‹‰ ‘ˆ †‡•‹‰ƒ–‡† •‡ —”‹–‹‡•ǡ ƒ• ƒ› „‡
applicable in coordination with depositories. Once, the company makes good the compliance of the listing conditions
under the LODR Regulations, stock exchange withdraws the suspension and permits trading.

On the other hand, ‘delisting’ of securities means removal of the name of the company from the stock exchange and
no trade can take place in the securities of the company delisted. Delisting of securities can be done either by
company voluntarily or by the stock exchange, compulsorily. Generally, stock exchange, in order to impose severe
punishment on companies compulsorily delists securities of a company, as a last resort. Compulsory delisting
affects reputation of company and the extent of liquidity in trading those shares.

Company ceasing to carry on the business, bankruptcy, merger are also some of the reasons behind delisting of a
company. Delisting curbs the securities of the delisted company from being traded on the stock exchange. It can be
done either on voluntary decision of the company or forcibly done by SEBI on account of some wrong doing by the
company. There are certain norms which a company needs to follow while listing on the stock exchange.

In case the company fails to do so, then SEBI takes the action which generally leads to delisting of the company from
the stock exchange. Whenever there is transfer of Business or Regulators demands or there is lack of trading volume
‹”‡‰‹‘ƒŽ‡š Šƒ‰‡•–Š‡‡‡†‘ˆ‡Ž‹•–‹‰ƒ”‹•‡•Ǥ––‹‡• Šƒ‰‡‹ ˜‡•–‘”•”‘ϐ‹Ž‡ƒ†ˆ—†‹‰’ƒ––‡”•ƒ›
also trigger Delisting.

GENESIS
In its continuous endeavor to ease the process of delisting, SEBI in the year 2002 constituted a committee on
delisting of shares to inter alia examine and review the conditions for delisting of securities of companies listed on
recognized stock exchanges and suggest norms and procedures in connection therewith. The Report of the
Committee was considered and accepted by SEBI. Pursuant to the same, SEBI issued the SEBI (Delisting of Securities)
Guidelines, 2003.

The said Guidelines, although to a great extent, covered the issues involved in Delisting of Securities. Various
representations and views, from intermediaries, stock exchanges, shareholders’ associations, chambers of
commerce, etc., were given to the Regulators on the operational issues and procedural complications in the guidelines.

SEBI circulated Concept Paper on the proposed SEBI (Delisting of Securities) Regulations, 2006, asking for public
comments on the proposed Regulations. SEBI received various comments, opinions and suggestions on the subject
ƒ†ϐ‹ƒŽŽ›ǡ„›‹–•’—„Ž‹ ƒ–‹‘†ƒ–‡† —‡ͳͲǡʹͲͲͻ‹–Š‡ˆϐ‹ ‹ƒŽ ƒœ‡––‡ǡ–Š‡ ‘–‹ϐ‹‡†–Š‡ ȋ‡Ž‹•–‹‰‘ˆ
Equity Shares) Regulations, 2009, thereby superseding the earlier SEBI (Delisting of Securities) Guidelines, 2003.
 Lesson 8 • SEBI (Delisting of Equity Shares) Regulations, 2021 247

Since then, several amendments have been carried out in the Delisting Regulations according to the changing needs
and developments in the securities market.

To further streamline and strengthen the delisting process / regulations, a comprehensive review of
the delisting regulations is proposed with the following key objectives:
• Enhance disclosures to help investors to take informed investment decisions
Ȉ ‡ϐ‹‡’”‘ ‡••
• Rationalize the existing timelines, so as to complete the delisting in time bound manner
Ȉ –”‡ƒŽ‹‡–Š‡†‡Ž‹•–‹‰”‡‰—Žƒ–‹‘•–‘ƒ‡‹–”‘„—•–ǡ‡ˆϐ‹ ‹‡–ǡ–”ƒ•’ƒ”‡–ƒ†‹˜‡•–‘”ǯ•ˆ”‹‡†Ž›
• Plug gaps
• Update references to the Companies Act, 2013 and other securities laws.
ƒ‹‰‘–‡‘ˆ–Š‡ƒ„‘˜‡‘„Œ‡ –‹˜‡•ǡ ˜‹†‡‹–•‘–‹ϐ‹ ƒ–‹‘†ƒ–‡† —‡ͳͲǡʹͲʹͳŠƒ†‘–‹ϐ‹‡†–Š‡ ȋ‡Ž‹•–‹‰
of Equity Shares) Regulations, 2021 which have now completely replaced the SEBI (Delisting of Equity Shares)
Regulations, 2009.

REGULATORY FRAMEWORK OF SEBI (DELISTING OF EQUITY SHARES) REGULATIONS, 2021

These regulations contain 8 chapters and 4 schedules dealing with the following:

1. Chapter I ”‡Ž‹‹ƒ”›ȋ‡ϐ‹‹–‹‘•Ȍ

2. Chapter II Delisting of Equity Shares

3. Chapter III Voluntary Delisting

4. Chapter IV Exit Opportunity

5. Chapter V Compulsory Delisting

6. Chapter VI Special Provisions for Small Companies

7. Chapter VII Miscellaneous

8. Chapter VIII Powers of Board, Directions by the Board, Repeal and Savings

9. Schedule I Contents of the detailed Public Announcement

10. Schedule II The Reverse Book Building Process
11. Schedule III Guidelines for Compulsory Delisting

12. Schedule IV Timelines for Counter Offer

APPLICABILITY (REGULATION 3)
These regulations shall be applicable to delisting of equity shares of a company including equity shares having
superior voting rights from all or any of the recognized stock exchanges where such shares are listed.
 248 Lesson 8 • EP-SLCM

NON-APPLICABILITY
These regulation shall not be applicable to :–
• securities listed and traded on the innovators growth platform of a recognised stock exchange, without
making a public issue;
• any delisting of equity shares of a listed entity made pursuant to a resolution plan approved under section 31
of the Insolvency Code, if such plan, –
(a) provides for delisting of such share; or
ȋ„Ȍ ’”‘˜‹†‡•ƒ‡š‹–‘’’‘”–—‹–›–‘–Š‡‡š‹•–‹‰’—„Ž‹ •Šƒ”‡Š‘Ž†‡”•ƒ–ƒ•’‡ ‹ϐ‹‡†’”‹ ‡Ǥ

However, the existing public shareholders shall be provided an exit opportunity at a price which shall not be less
than the price, by whatever name called, at which a promoter or any entity belonging to the promoter group or any
other shareholder, directly or indirectly, is provided an exit opportunity:
”‘˜‹†‡† ƒŽ•‘ –Šƒ–ǡ –Š‡ †‡–ƒ‹Ž• ‘ˆ †‡Ž‹•–‹‰ ‘ˆ •— Š •Šƒ”‡• ƒŽ‘‰ ™‹–Š –Š‡ Œ—•–‹ϐ‹ ƒ–‹‘ ˆ‘” ‡š‹– ’”‹ ‡ ‹ ”‡•’‡ – ‘ˆ
delisting proposed shall be disclosed to the recognized stock exchanges within one day of resolution plan being
approved under section 31 of the Insolvency Code.
CONDITIONS FOR DELISTING
Regulation 4 provides that neither any company shall apply for nor any recognised stock exchange shall permit
delisting of equity shares of a company-

Pursuant to Buy-back of equity shares by the company1

Pursuant to Preferential allotment made by the company2

1. Unless a period of 6 months has lapsed from the date of completion of such buyback.
2. Unless a period of 6 months has lapsed from the date of completion of such allotment.
 Lesson 8 • SEBI (Delisting of Equity Shares) Regulations, 2021 249

Unless a period of three years has elapsed since the listing of that
class of equity shares

Instruments which are convertible into the same class of equity shares that are sought to
be delisted are outstanding

‘ƒ “—‹”‡”•ŠƒŽŽ†‹”‡ –Ž›‘”‹†‹”‡ –Ž›‡’Ž‘›–Š‡ˆ—†•‘ˆ–Š‡ ‘’ƒ›–‘ϐ‹ƒ ‡ƒ‡š‹–

opportunity or an acquisition of shares made pursuant to delisting provided under these
regulation

An acquirer shall not propose delisting of equity shares of a company, if the acquirer had
•‘Ž†‡“—‹–›•Šƒ”‡•‘ˆ–Š‡ ‘’ƒ›†—”‹‰–Š‡ƒ’‡”‹‘†‘ˆ•‹š‘–Š•’”‹‘”–‘–Š‡†ƒ–‡‘ˆ
the initial public announcement

No acquirer shall, directly or indirectly-

• ’Ž‘›ƒ›†‡˜‹ ‡ǡ• Š‡‡‘”ƒ”–‹ϐ‹ ‡–‘†‡ˆ”ƒ—†ƒ›•Šƒ”‡Š‘Ž†‡”‘”‘–Š‡”’‡”•‘Ǣ‘”
• Engage in any transaction or practice that operates as a fraud or deceit upon any
shareholder or other person; or
• Engage in any act or practice that is fraudulent, deceptive or manipulative in connection with
any delisting of equity shares.

VOLUNTARY DELISTING
“Voluntary Delisting” means the delisting of equity shares of a company voluntarily on an application made by the
company under Chapter III of these regulations. In voluntary delisting, the promoters of the listed company decides
on their own to permanently remove its securities from a stock exchange.
‘†‹–‹‘•ƒ†’”‘ ‡†—”‡ˆ‘”†‡Ž‹•–‹‰™Š‡”‡‡š‹–‘’’‘”–—‹–›‹•‘–”‡“—‹”‡†
Regulation 5 of SEBI (Delisting of Equity Shares) Regulations, 2021 provides that a company may delist its equity
shares from one or more of the recognised stock exchanges on which it is listed without providing an exit opportunity
to the public shareholders, if after the proposed delisting, the equity shares remain listed on any recognised stock
exchange that has nationwide trading terminals. Any company desirous of delisting its equity shares where no exit
opportunity is required shall-

obtain the prior approval of its Board of Directors

make an application to the relevant recognised stock exchange for delisting its equity shares

issue a public notice of the proposed delisting in at least one English national newspaper, one Hindi national
newspaper with wide circulation in their all India editions and one vernacular newspaper of the region where
the relevant stock exchange is located
 250 Lesson 8 • EP-SLCM

†‹• Ž‘•‡–Š‡ˆƒ –‘ˆ†‡Ž‹•–‹‰‹‹–•ϐ‹”•–ƒ—ƒŽ”‡’‘”–’‘•–†‡Ž‹•–‹‰

an application for delisting shall be disposed of by the recognised stock exchange within a period not
exceeding thirty working days from the date of receipt of such application that is complete in all respects

The following details shall be provided in the above mentioned Public notice:
(a) The names of the recognized stock exchanges from where the equity shares of the company are intended to
be delisted.
(b) The reasons for such delisting.
(c) The fact of continuation of listing of equity shares on recognized stock exchange having nationwide trading
terminals.

‘†‹–‹‘•ƒ†’”‘ ‡†—”‡ˆ‘”†‡Ž‹•–‹‰™Š‡”‡‡š‹–‘’’‘”–—‹–›‹•”‡“—‹”‡†
Regulation 7 provides that the equity shares of a company may be delisted from all the recognised stock exchanges
having nationwide trading terminals on which they are listed, after an exit opportunity has been provided by the
acquirer to all the public shareholders holding the equity shares sought to be delisted, in accordance with Chapter
IV of these regulations.
Initial public announcement (Regulation 8)
On the date when the acquirer decides to voluntarily delist the equity shares of the company, it shall make an initial
public announcement to all the stock exchanges on which the shares of the company are listed and the stock
exchanges shall forthwith disseminate the same to the public.
 ‘’›‘ˆ–Š‡‹‹–‹ƒŽ’—„Ž‹ ƒ‘— ‡‡–•ŠƒŽŽƒŽ•‘„‡•‡––‘–Š‡ ‘’ƒ›ƒ–‹–•”‡‰‹•–‡”‡†‘ˆϐ‹ ‡‘–Žƒ–‡”–Šƒ‘‡
working day from the date of the initial public announcement.
The initial public announcement shall contain:—
(a) the reasons for delisting;
(b) an undertaking with respect to compliance with regulations 4(2) and 4(5) of these regulations;
(4) the initial public announcement shall not omit any relevant information or contain any misleading information.

Appointment of the manager to the offer (Regulation 9)

Prior to making an initial public announcement, the acquirer shall appoint a merchant banker registered with the
SEBI as the Manager to the offer. The Manager to the offer shall not be an associate of the acquirer.
The initial public announcement and the subsequent activities as required under these regulations shall be
undertaken by the acquirer through the Manager to the offer.
Obligation of the manager to the offer (Regulation 29)
Before making the detailed public announcement, the Manager to the offer for delisting of equity shares shall ensure
that, —
• the acquirer is able to implement the delisting offer.
• ϐ‹”ƒ””ƒ‰‡‡–•ˆ‘”ˆ—†•–Š”‘—‰Š˜‡”‹ϐ‹ƒ„Ž‡‡ƒ•Šƒ˜‡„‡‡ƒ†‡„›–Š‡ƒ “—‹”‡”–‘‡‡––Š‡’ƒ›‡–
obligations under the delisting offer.
• the contents of the initial public announcement, the detailed public announcement, the letter of offer and the
post-bidding advertisement(s) are complete, true, fair and adequate in all material aspects, based on reliable
sources and are in compliance with the requirements under these regulations and other applicable securities
laws.
 Lesson 8 • SEBI (Delisting of Equity Shares) Regulations, 2021 251

• market intermediaries engaged for the purpose of the delisting of equity shares are registered with the SEBI.
• the Manager to the offer shall exercise due diligence, care and professional judgment to ensure compliance
with these regulations.
• the Manager to the offer shall not, either directly or indirectly through its associates, deal in its own account
in the shares of the company after its appointment as Manager to the offer till the conclusion of the delisting offer.
• the Manager to the offer to ensure that the acquirer complies with the provisions of these regulations.

Approval by the Board of Directors (Regulation 10)

The company shall obtain the approval of its Board of Directors in respect of the proposal, not later than twenty one
days from the date of the initial public announcement.
The Board of Directors of the company, while considering the proposal for delisting, shall certify that—
(a) the company is in compliance with the applicable provisions of securities laws;
(b) the acquirer and its related entities are in compliance with the applicable provisions of securities laws in
terms of the Company Secretary including compliance with sub-regulation (5) of regulation 4 of these
regulations;
(c) the delisting, in their opinion, is in the interest of the shareholders of the company.

While communicating the decision of the Board of Directors on the proposal for delisting of equity shares, the
company shall also submit to the recognized stock exchanges on which the equity shares of the company are listed,
the due - diligence report of the Company Secretary and the audit report as per regulation 76 of the SEBI (Depositories
and Participants) Regulations, 2018.
Upon receipt of the above mentioned communication from the company, the stock exchanges shall forthwith
disseminate the same to the public.
Appointment of peer reviewer Company Secretary to carry out the Due-Diligence
The Board of Directors of the company, before considering the proposal of delisting, shall appoint a Peer Reviewer
Company Secretary and provide the following information to such Company Secretary for carrying out due-
diligence: -
(a) the details of buying, selling and dealing in the equity shares of the company by the acquirer or its related
entities during the period of two years prior to the date of board meeting held to consider the proposal for
†‡Ž‹•–‹‰ǡ‹ Ž—†‹‰–Š‡†‡–ƒ‹Ž•‘ˆ–Š‡–‘’–™‡–›ϐ‹˜‡•Šƒ”‡Š‘Ž†‡”•ǡˆ‘”–Š‡•ƒ‹†’‡”‹‘†Ǣ
(b) the details of off-market transactions of all the shareholders mentioned in clause (a) for a period of two years;
(c) any additional information if the Company Secretary is of the opinion that the information provided under
Žƒ—•‡•ȋƒȌƒ†ȋ„Ȍ‹•‘–•—ˆϐ‹ ‹‡–ˆ‘”’”‘˜‹†‹‰–Š‡ ‡”–‹ϐ‹ ƒ–‹‘Ǥ
After obtaining the information from the Board of Directors of the company, the Company Secretary shall carry out
the due-diligence and submit a report to the Board of Directors of the company certifying that the buying, selling
and dealing in the equity shares of the company carried out by the acquirer or its related entities and the top twenty
ϐ‹˜‡•Šƒ”‡Š‘Ž†‡”•‹•‹ ‘’Ž‹ƒ ‡™‹–Š–Š‡ƒ’’Ž‹ ƒ„Ž‡’”‘˜‹•‹‘•‘ˆ•‡ —”‹–‹‡•Žƒ™•‹ Ž—†‹‰–Š‡•‡”‡‰—Žƒ–‹‘•Ǥ
Approval by shareholders (Regulation 11)
The company shall obtain the approval of the shareholders through a
•’‡ ‹ƒŽ”‡•‘Ž—–‹‘ǡ‘–Žƒ–‡”–Šƒˆ‘”–›ϐ‹˜‡†ƒ›•ˆ”‘–Š‡†ƒ–‡‘ˆ‘„–ƒ‹‹‰ The special resolution shall be
the approval of Board of Directors. The special resolution shall be passed acted upon only if the votes cast by
–Š”‘—‰Š’‘•–ƒŽ„ƒŽŽ‘–ƒ†Ȁ‘”‡Ǧ˜‘–‹‰ƒ•’‡”–Š‡ƒ’’Ž‹ ƒ„Ž‡’”‘˜‹•‹‘•‘ˆ the public shareholders in favour
the Companies Act, 2013 and the rules made thereunder. The company of the proposal are at least two
shall disclose all material facts in the explanatory statement sent to the times the number of votes cast by
shareholders in relation to such a resolution. the public shareholders against it.
 252 Lesson 8 • EP-SLCM

 Ǧ’”‹ ‹’Ž‡ƒ’’”‘˜ƒŽ‘ˆ–Š‡•–‘ ‡š Šƒ‰‡ȋ‡‰—Žƒ–‹‘ͳʹȌ

The company shall make an application to the relevant recognised stock exchange for in-principle approval of the
’”‘’‘•‡††‡Ž‹•–‹‰‘ˆ‹–•‡“—‹–›•Šƒ”‡•‹–Š‡ ‘”•’‡ ‹ϐ‹‡†ǡ‘–Žƒ–‡”–Šƒϐ‹ˆ–‡‡™‘”‹‰†ƒ›•ˆ”‘–Š‡†ƒ–‡‘ˆ
passing of the special resolution or receipt of any other statutory or regulatory approval, whichever is later.
The application seeking in-principle approval for the delisting of equity shares shall be accompanied by an audit
report as required under regulation 76 of the SEBI (Depositories and Participants) Regulations, 2018 in respect of
the equity shares sought to be delisted, covering a period of six months prior to the date of the application.
Such application seeking in-principle approval for the delisting of the equity shares shall be disposed of by the
”‡ ‘‰‹•‡† •–‘  ‡š Šƒ‰‡ ™‹–Š‹ ƒ ’‡”‹‘† ‘– ‡š ‡‡†‹‰ǡ ϐ‹ˆ–‡‡ ™‘”‹‰ †ƒ›• ˆ”‘ –Š‡ †ƒ–‡ ‘ˆ ”‡ ‡‹’– ‘ˆ •— Š
application that is complete in all respects.
Escrow account (Regulation 14)
The acquirer shall open an interest bearing escrow account with a Scheduled Commercial Bank, not later than
seven working days from the date of obtaining the shareholders’ approval, and deposit therein an amount equivalent
–‘–™‡–›ϐ‹˜‡’‡” ‡–‘ˆ–Š‡–‘–ƒŽ ‘•‹†‡”ƒ–‹‘ǡ ƒŽ —Žƒ–‡†‘–Š‡„ƒ•‹•‘ˆ–Š‡—„‡”‘ˆ‡“—‹–›•Šƒ”‡•‘—–•–ƒ†‹‰
™‹–Š–Š‡’—„Ž‹ •Šƒ”‡Š‘Ž†‡”•—Ž–‹’Ž‹‡†™‹–Š–Š‡ϐŽ‘‘”’”‹ ‡‘”–Š‡‹†‹ ƒ–‹˜‡’”‹ ‡ǡ‹ˆƒ›‰‹˜‡„›–Š‡ƒ “—‹”‡”‹
terms of these regulations, whichever is higher.
The acquirer shall enter into a tripartite agreement with the Manager to the offer and the Bank for the purpose of
opening the escrow account and shall authorize the Manager to the offer to operate such account as per the
provisions of these regulations.
Before making the detailed public announcement, the acquirer shall deposit in the escrow account, the remaining
‘•‹†‡”ƒ–‹‘ƒ‘—–„‡‹‰•‡˜‡–›ϐ‹˜‡’‡” ‡– ƒŽ —Žƒ–‡†‘–Š‡„ƒ•‹•‘ˆ–Š‡—„‡”‘ˆ‡“—‹–›•Šƒ”‡•‘—–•–ƒ†‹‰
™‹–Š–Š‡’—„Ž‹ •Šƒ”‡Š‘Ž†‡”•—Ž–‹’Ž‹‡†™‹–Š–Š‡ϐŽ‘‘”’”‹ ‡‘”–Š‡‹†‹ ƒ–‹˜‡’”‹ ‡ǡ‹ˆƒ›‰‹˜‡„›–Š‡ƒ “—‹”‡”‹
terms of these regulations, whichever is higher.
On determination of the discovered price and making of the public
announcement accepting the discovered price, the acquirer shall forthwith The escrow account shall consist
†‡’‘•‹–‹–Š‡‡• ”‘™ƒ ‘—–•— Šƒ††‹–‹‘ƒŽ•—ƒ•ƒ›„‡•—ˆϐ‹ ‹‡––‘ of either the cash deposited with a
make up the entire sum due and payable as consideration in respect of Scheduled Commercial Bank or a
equity shares outstanding with the public shareholders. bank guarantee in favour of the
Manager to the offer or a
In case of failure of the delisting offer, ninety nine percent of the amount combination of both.
lying in the escrow account shall be released to the acquirer within one
working day from the date of public announcement of such failure. The remaining one percent amount lying in the
‡• ”‘™ƒ ‘—–•ŠƒŽŽ„‡”‡Ž‡ƒ•‡†’‘•–”‡–—”‘ˆ–Š‡•Šƒ”‡•–‘–Š‡’—„Ž‹ •Šƒ”‡Š‘Ž†‡”•‘” ‘ϐ‹”ƒ–‹‘‘ˆ”‡˜‘ ƒ–‹‘
of lien marked on their shares by the Manager to the offer as per the timelines provided in these regulations.
Detailed public announcement (Regulation 15)
The acquirer shall, within one working day from the date of receipt of in-principle approval for delisting of equity
shares from the recognised stock exchange, make a detailed public announcement in at least one English national
newspaper with wide circulation, one Hindi national newspaper with wide circulation in their all India editions and
one vernacular newspaper of the region where the relevant recognised stock exchange is located.
Š‡ †‡–ƒ‹Ž‡† ’—„Ž‹  ƒ‘— ‡‡– •ŠƒŽŽ ‘–ƒ‹ ƒŽŽ ƒ–‡”‹ƒŽ ‹ˆ‘”ƒ–‹‘ ‹ Ž—†‹‰ –Š‡ ‹ˆ‘”ƒ–‹‘ •’‡ ‹ϐ‹‡† ‹
Schedule I of these regulations and shall not contain any false or misleading statement.
The detailed public announcement shall also specify a date, being a day not later than one working day from the
†ƒ–‡ ‘ˆ –Š‡ †‡–ƒ‹Ž‡† ’—„Ž‹  ƒ‘— ‡‡–ǡ ™Š‹ Š •ŠƒŽŽ „‡ –Š‡ Ǯ•’‡ ‹ϐ‹‡† †ƒ–‡ǯ ˆ‘” †‡–‡”‹‹‰ –Š‡ ƒ‡• ‘ˆ –Š‡
shareholders to whom the letter of offer shall be sent. The detailed public announcement shall be dated and signed
by the acquirer.
 Lesson 8 • SEBI (Delisting of Equity Shares) Regulations, 2021 253

Letter of offer (Regulation 16)

The acquirer shall dispatch the letter of offer to the public shareholders not later than two working days from the
date of the detailed public announcement made. The letter of offer shall be sent to all public shareholders, holding
equity shares of the class sought to be delisted, whose names appear on the register of the company or depository
ƒ•‘–Š‡†ƒ–‡•’‡ ‹ϐ‹‡†‹–Š‡†‡–ƒ‹Ž‡†’—„Ž‹ ƒ‘— ‡‡–Ǥ
A copy of the letter of offer shall also be made available on the websites of the company and the Manager to the offer
ˆ‘”–Š‡„‡‡ϐ‹–‘ˆ–Š‡’—„Ž‹ •Šƒ”‡Š‘Ž†‡”•ǤŠ‡Ž‡––‡”‘ˆ‘ˆˆ‡”•ŠƒŽŽ ‘–ƒ‹ƒŽŽ–Š‡†‹• Ž‘•—”‡•ƒ†‡‹–Š‡†‡–ƒ‹Ž‡†
public announcement and such other disclosures as may be necessary for the shareholders to take an informed
decision.
Bidding mechanism (Regulation 17)
The bidding period shall start not later than seven working days from the date of the detailed public announcement
ƒ†•ŠƒŽŽ”‡ƒ‹‘’‡ˆ‘”ϐ‹˜‡™‘”‹‰†ƒ›•ǤŠ‡ƒ “—‹”‡”•ŠƒŽŽˆƒ ‹Ž‹–ƒ–‡–‡†‡”‹‰‘ˆ•Šƒ”‡•„›–Š‡•Šƒ”‡Š‘Ž†‡”•
ƒ†•‡––Ž‡‡–‘ˆ–Š‡•ƒ‡ǡ–Š”‘—‰Š–Š‡•–‘ ‡š Šƒ‰‡‡ Šƒ‹•ƒ••’‡ ‹ϐ‹‡†„›–Š‡ Ǥ
The Manager to the offer shall ensure that the outcome of the reverse book building process is announced within
two hours of the closure of the bidding period. Within two working days from the closure of the bidding period, the
acquirer shall, through the Manager to the offer, make a public announcement in the same newspapers in which the
detailed public announcement was made, disclosing the success or failure of the reverse book building process,
along with the discovered price accepted by the acquirer in the event of success of the said process.
Manner of tendering shares (Regulation 18)
Š‡‡“—‹–›•Šƒ”‡••ŠƒŽŽ„‡–‡†‡”‡†Ȁ‘ˆˆ‡”‡†„›–Š‡’—„Ž‹ •Šƒ”‡Š‘Ž†‡”•ǡ‹ Ž—†‹‰„›™ƒ›‘ˆƒ”‹‰ƒŽ‹‡–Š”‘—‰Š
–Š‡•–‘ ‡š Šƒ‰‡‡ Šƒ‹•ǡ‹–Š‡ƒ‡”•’‡ ‹ϐ‹‡†„›–Š‡ Ǥ
Right of shareholders to participate in the reverse book building process (Regulation 19)

Public shareholders holding the equity shares of the company, which are sought to be delisted, shall be entitled to
’ƒ”–‹ ‹’ƒ–‡‹–Š‡”‡˜‡”•‡„‘‘„—‹Ž†‹‰’”‘ ‡••‹–Š‡ƒ‡”•’‡ ‹ϐ‹‡†‹ Š‡†—Ž‡ ‘ˆ–Š‡•‡”‡‰—Žƒ–‹‘•ǤŠ‡
Manager to the issue shall take necessary steps to ensure compliance with the same.
Any holder of depository receipts issued on the basis of underlying equity shares and a custodian keeping custody
of such equity shares shall not be entitled to participate in the reverse book building process.
However, any holder of depository receipts may participate in the reverse book building process after converting
such depository receipts into equity shares of the company that are proposed to be delisted.

Discovered price (Regulation 20)

Š‡ϐŽ‘‘”’”‹ ‡•ŠƒŽŽ„‡†‡–‡”‹‡†‹–‡”•‘ˆ”‡‰—Žƒ–‹‘ͺ‘ˆƒ‡‘˜‡”‡‰—Žƒ–‹‘•ƒ•ƒ›„‡ƒ’’Ž‹ ƒ„Ž‡Ǥ
ˆ–‡”ϐ‹šƒ–‹‘‘ˆ–Š‡ϐŽ‘‘”’”‹ ‡ǡ–Š‡†‹• ‘˜‡”‡†’”‹ ‡•ŠƒŽŽ„‡†‡–‡”‹‡†–Š”‘—‰Š–Š‡”‡˜‡”•‡„‘‘„—‹Ž†‹‰’”‘ ‡••
‹–Š‡ƒ‡”•’‡ ‹ϐ‹‡†‹ Š‡†—Ž‡ ‘ˆ–Š‡•‡”‡‰—Žƒ–‹‘•ǡƒ†–Š‡ƒƒ‰‡”–‘–Š‡‘ˆˆ‡”•ŠƒŽŽ†‹• Ž‘•‡–Š‡•ƒ‡‹
the detailed public announcement and the letter of offer.
The acquirer shall have the option to provide an indicative price in respect of the delisting offer, which shall be
Š‹‰Š‡”–Šƒ–Š‡ϐŽ‘‘”’”‹ ‡ǤŠ‡ƒ “—‹”‡”•ŠƒŽŽƒŽ•‘Šƒ˜‡–Š‡‘’–‹‘–‘”‡˜‹•‡–Š‡‹†‹ ƒ–‹˜‡’”‹ ‡—’™ƒ”†•„‡ˆ‘”‡–Š‡
start of the bidding period and the same shall be duly disclosed to the shareholders.
Š‡ƒ “—‹”‡”ƒ›ǡ‹ˆ‹–†‡‡•ϐ‹–ǡ’ƒ›ƒ’”‹ ‡Š‹‰Š‡”–Šƒ–Š‡†‹• ‘˜‡”‡†’”‹ ‡Ǥ

In case the discovered price is not acceptable to the acquirer, a counter offer may be made by the acquirer to the
public shareholders within two working days of the closure of bidding period
 254 Lesson 8 • EP-SLCM

Minimum number of equity shares to be acquired (Regulation 21)

An offer made or a counter offer made by the acquirer, as the case may be, shall be deemed to be successful if,-
(a) the post offer promoter shareholding (along with the persons acting in concert with the promoter) taken
–‘‰‡–Š‡”™‹–Š–Š‡•Šƒ”‡•ƒ ‡’–‡†–Š”‘—‰Š‡Ž‹‰‹„Ž‡„‹†•ƒ––Š‡ϐ‹ƒŽ’”‹ ‡†‡–‡”‹‡†ǡ”‡ƒ Š‡•ͻͲΨ‘ˆ–Š‡–‘–ƒŽ
issued shares of that class excluding the following:
(i) shares which are held by a custodian and against which depository receipts have been issued overseas;
and
ȋ‹‹Ȍ •Šƒ”‡•Š‡Ž†„›ƒ”—•–•‡–—’ˆ‘”‹’Ž‡‡–‹‰ƒ’Ž‘›‡‡‡‡ϐ‹–• Š‡‡—†‡”–Š‡‡ —”‹–‹‡•ƒ†
š Šƒ‰‡‘ƒ”†‘ˆ †‹ƒȋŠƒ”‡ƒ•‡†’Ž‘›‡‡‡‡ϐ‹–•Ȍ‡‰—Žƒ–‹‘•ǡʹͲͳͶǢ
(iii) shares held by inactive shareholders such as vanishing companies and struck off companies, shares
transferred to the Investor Education and Protection Fund’s account and shares held in terms of sub-
regulation (4) of regulation 39 read with Schedule VI of the Securities and Exchange Board of India
(Listing Obligations and Disclosure Requirements) Regulations 2015.

‘™‡˜‡”ǡ•— Š•Šƒ”‡Š‘Ž†‡”••ŠƒŽŽ„‡ ‡”–‹ϐ‹‡†„›–Š‡‡‡”‡˜‹‡™‘’ƒ›‡ ”‡–ƒ”›ƒ’’‘‹–‡†„›–Š‡‘ƒ”†‘ˆ

Directors of the company for due-diligence.
Explanation,— The cut-off date for determination of inactive shareholders shall be the date on which the in-principle
approval of the Stock Exchange is received, which shall be adequately disclosed in the public announcement.

An illustration for arriving at the discovered price is given as under:

Bid Price Number of Demand (Number of Cumulative demand

(Rs.) investors shares) (Number of shares)

550 5 2,50,000 2,50,000

565 8 4,00,000 6,50,000

575 10 2,00,000 8,50,000

585 4 4,00,000 12,50,000

595 6 1,20,000 13,70,000

600 5 1,30,000 15,00,000 Final Offer Price

605 3 2,10,000 17,10,000

610 3 1,40,000 18,50,000

615 3 1,50,000 20,00,000

620 1 5,00,000 25,00,000

Total 48 25,00,000

–Š‡‰‹˜‡‹ŽŽ—•–”ƒ–‹‘ǡƒ••—‹‰ϐŽ‘‘”’”‹ ‡‘ˆ•ǤͷͷͲȀǦ’‡”•Šƒ”‡ǡ’”‘‘–‡”Ȁƒ “—‹”‡”•Šƒ”‡Š‘Ž†‹‰ƒ–͹ͷΨ

ƒ†—„‡”‘ˆ•Šƒ”‡•”‡“—‹”‡†ˆ‘”•— ‡••ˆ—Ž†‡Ž‹•–‹‰ƒ•ͳͷǡͲͲǡͲͲͲǡ–Š‡ϐ‹ƒŽ’”‹ ‡™‘—Ž†„‡–Š‡’”‹ ‡ƒ–™Š‹ Š
–Š‡’”‘‘–‡””‡ƒ Š‡•–Š‡–Š”‡•Š‘Ž†‘ˆͻͲΨǡ‹Ǥ‡Ǥǡ‹–™‘—Ž†„‡•Ǥ͸ͲͲȀǦ’‡”•Šƒ”‡Ǥ
 Lesson 8 • SEBI (Delisting of Equity Shares) Regulations, 2021 255

Option to accept or reject the discovered price or counter offer (Regulation 22)
The acquirer shall be bound to accept the equity shares tendered or offered in the delisting offer, if the discovered
’”‹ ‡†‡–‡”‹‡†–Š”‘—‰Š–Š‡”‡˜‡”•‡„‘‘„—‹Ž†‹‰’”‘ ‡••‹•‡“—ƒŽ–‘–Š‡ϐŽ‘‘”’”‹ ‡‘”–Š‡‹†‹ ƒ–‹˜‡’”‹ ‡ǡ‹ˆƒ›ǡ
offered by the acquirer.
The acquirer shall be bound to accept the equity shares, at the indicative price, if any offered by the acquirer, even
‹ˆ–Š‡’”‹ ‡†‡–‡”‹‡†–Š”‘—‰Š–Š‡”‡˜‡”•‡„‘‘„—‹Ž†‹‰’”‘ ‡••‹•Š‹‰Š‡”–Šƒ–Š‡ϐŽ‘‘”’”‹ ‡„—–Ž‡••–Šƒ–Š‡
indicative price.
However, the abovementioned provisions shall not apply if the discovered price is higher than the indicative price.
In case the discovered price is not acceptable to the acquirer, a counter The counter offer price shall not be
offer may be made by the acquirer to the public shareholders within two less than the book value of the
working days of the closure of bidding period and thereafter, the acquirer ‘’ƒ›ƒ• ‡”–‹ϐ‹‡†„›–Š‡ƒƒ‰‡”
shall ensure compliance with the provisions of these regulations in to the offer.
accordance with the timelines provided in Schedule IV.
Timelines for counter offer (Schedule IV)

Sr. Activity Timelines

No.
1. Public announcement of counter offer by the Within 2 working days from the date of closure of reverse
acquirer through stock exchange mechanism book building bidding process
2. Publication of counter offer public announcement Within 4 working days from the closure of the reverse
in the same newspapers where the detailed book building bidding process
public announcement was made
3. Option to withdraw the shares tendered during Within 10 working days from the counter offer public
the reverse book building process announcement
4. Dispatch of “Letter of offer for counter offer” Within 4 working days from the closure of the reverse
book building bidding process
5. Opening of counter offer bidding process Not later than 7 working days from the date of public
announcement
6. Closing of counter offer bidding process Not later than 5 working days from the opening of
counter offer bidding process

7. —„Ž‹  ƒ‘— ‡‡– ‘ˆ •— ‡••Ȁˆƒ‹Ž—”‡ ‘ˆ Not later than 5 working days of the closing of the
counter offer in the same newspaper in which counter offer bidding process
detailed public announcement was made
8. Payment of consideration Not later than 10 working days from the closing of
counter offer or through the secondary market
settlement mechanism, as the case may be
9. Release of equity shares On the date of making public announcement of the
success or failure of the counter offer

Failure of offer (Regulation 23)

if the minimum number of shares

ƒ”‡‘––‡†‡”‡†Ȁ‘ˆˆ‡”‡†
The delisting offer shall be
considered to have failed
if the price discovered through the
reverse book building process is
rejected by the acquirer
 256 Lesson 8 • EP-SLCM

ͳȌ Š‡”‡–Š‡†‡Ž‹•–‹‰‘ˆˆ‡”ˆƒ‹Ž•–Š‡‡“—‹–›•Šƒ”‡•–‡†‡”‡†Ȁ‘ˆˆ‡”‡†ƒ•–Š‡ ƒ•‡ƒ›„‡ǡ•ŠƒŽŽ„‡”‡Ž‡ƒ•‡†Ǧ

• on the date of disclosure of the outcome of the reverse book building process if the minimum number of
•Šƒ”‡•ƒ”‡‘––‡†‡”‡†Ȁ‘ˆˆ‡”‡†Ǣ
• on the date of making public announcement for the failure of the delisting offer if the price discovered
through the reverse book building process is rejected by the acquirer;
• in accordance with Schedule IV of these regulations if a counter offer has been made by the acquirer.
However, the acquirer shall not be required to return the shares if the offer is made pursuant to regulation 5A of the
SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011.
2) Where the delisting offer fails-

The acquirer,
The expenses whose delisting
relating to the offer has failed,
offer for delisting shall not make
shall be borne by another delisting
the acquirer offer until the
expiry of six
months

Payment upon success of the offer (Regulation 24)

All the public shareholders, whose bids are accepted, shall be paid the discovered price or a higher price, if any,
offered by the acquirer, as stated in the public announcement in the following manner -
ȋ‹Ȍ  ƒ•‡–Š‡†‹• ‘˜‡”‡†’”‹ ‡‹•‡“—ƒŽ–‘–Š‡ϐŽ‘‘”’”‹ ‡‘”–Š‡‹†‹ ƒ–‹˜‡’”‹ ‡‘”‹ ƒ•‡–Š‡ƒ “—‹”‡”‹•„‘—†
to accept the equity shares in the delisting offer, the payment shall be made through the secondary market
settlement mechanism;
ȋ‹‹Ȍ  ƒ•‡–Š‡†‹• ‘˜‡”‡†’”‹ ‡‘”–Š‡’”‹ ‡ǡ‹ˆƒ›ǡ‘ˆˆ‡”‡†„›–Š‡ƒ “—‹”‡”ǡ‹•Š‹‰Š‡”–Šƒ–Š‡ϐŽ‘‘”’”‹ ‡‘”–Š‡
‹†‹ ƒ–‹˜‡’”‹ ‡ǡƒ•–Š‡ ƒ•‡ƒ›„‡ǡ–Š‡’ƒ›‡–•ŠƒŽŽ„‡ƒ†‡™‹–Š‹ϐ‹˜‡™‘”‹‰†ƒ›•ˆ”‘–Š‡†ƒ–‡‘ˆ–Š‡
public announcement.

The acquirer shall be liable to pay interest at the rate of ten percent per annum to all the shareholders, whose bids
have been accepted in the delisting offer, if the price payable is not paid to all the shareholders within the time
•’‡ ‹ϐ‹‡†–Š‡”‡—†‡”Ǥ
However, in case the delay was not attributable to any act or omission of the acquirer or was caused due to the
circumstances beyond the control of the acquirer, the SEBI may grant waiver from the payment of such interest.
 ‹ƒŽƒ’’Ž‹ ƒ–‹‘–‘–Š‡•–‘ ‡š Šƒ‰‡ƒˆ–‡”•— ‡••ˆ—Ž†‡Ž‹•–‹‰ȋ‡‰—Žƒ–‹‘ʹͷȌ
Within 5 working days from the date of making the payment to the public shareholders, the acquirer shall make the
ϐ‹ƒŽƒ’’Ž‹ ƒ–‹‘ˆ‘”†‡Ž‹•–‹‰–‘–Š‡”‡Ž‡˜ƒ–”‡ ‘‰‹•‡†•–‘ ‡š Šƒ‰‡‹–Š‡ ‘”•’‡ ‹ϐ‹‡†„›•— Š•–‘ ‡š Šƒ‰‡
from time to time.
Š‡ϐ‹ƒŽ ƒ’’Ž‹ ƒ–‹‘ ˆ‘”†‡Ž‹•–‹‰ •ŠƒŽŽ „‡ ƒ ‘’ƒ‹‡† ™‹–Š ‡ ‡••ƒ”›†‡–ƒ‹Ž• Ȁ ‹ˆ‘”ƒ–‹‘ǡ ƒ• –Š‡ ”‡ ‘‰‹•‡†
stock exchange may require, of having provided the exit opportunity.

Š‡ϐ‹ƒŽƒ’’Ž‹ ƒ–‹‘ˆ‘”†‡Ž‹•–‹‰•ŠƒŽŽ„‡†‹•’‘•‡†‘ˆ„›–Š‡”‡ ‘‰‹•‡†•–‘ ‡š Šƒ‰‡™‹–Š‹ͳͷ™‘”‹‰†ƒ›•

ˆ”‘–Š‡†ƒ–‡‘ˆ”‡ ‡‹’–‘ˆ•— Šƒ’’Ž‹ ƒ–‹‘–Šƒ–‹• ‘’Ž‡–‡‹ƒŽŽ”‡•’‡ –•Ǥ’‘†‹•’‘•ƒŽ‘ˆ–Š‡ϐ‹ƒŽƒ’’Ž‹ ƒ–‹‘ˆ‘”
delisting by the stock exchange, the equity shares of the company shall be permanently delisted from the stock
exchange.
 Lesson 8 • SEBI (Delisting of Equity Shares) Regulations, 2021 257

Right of the remaining public shareholders to tender equity shares (Regulation 26)
The remaining public shareholders, whose shares were either not accepted or were not tendered at all during the
bidding period, shall have a right to tender their equity shares for a minimum period of 1 year from the date of
delisting.
The acquirer shall be under an obligation during such period to accept the shares of the remaining public
shareholders, at the same price at which the equity shares had been delisted. The payment of consideration for
equity shares accepted shall be made out of the balance amount lying in the escrow account.
The Manager to the offer shall ensure that the amount lying in the escrow account or the bank guarantee shall not
be released to the acquirer for a minimum period of one year or till the time payment has been made to the remaining
public shareholders, whichever is earlier.
Cancellation of outstanding depository receipts (Regulation 31)
After delisting of equity shares from all the recognized stock exchanges having nationwide trading terminals, the
company shall be required to compulsorily cancel all the outstanding depository receipts issued overseas and
change them into the underlying equity shares in the home jurisdiction after termination of the depository receipts
program(s), within 1 year of such delisting.

OBLIGATIONS OF Upon receipt of the detailed public announcement, the Board of Directors of the company shall
THE COMPANY constitute a Committee of independent directors to provide reasoned recommendations on
(REGULATION 28) the delisting offer.
The Committee of independent directors shall provide its written reasoned recommendations
on the proposal for delisting of equity shares to the Board of Directors of the company and in
relation thereto, the Committee may also seek external professional advice at the expense of
the company.
The Committee of independent directors, while providing reasoned recommendations on the
delisting proposal, shall disclose the voting pattern of the meeting in which the said proposal
was discussed.
The company shall publish such recommendations of the Committee of independent
directors, along with the details of the voting pattern, at least 2 working days before the
commencement of the bidding period, in the same newspapers in which the detailed public
announcement of the offer for delisting of equity shares was published, and simultaneously,
a copy of the same shall be sent to the stock exchange(s) and the Manager to the offer.

OBLIGATIONS OF Prior to making the initial public announcement of the offer for the delisting of equity
THE ACQUIRER •Šƒ”‡•ǡ –Š‡ ƒ “—‹”‡” •ŠƒŽŽ ‡•—”‡ –Šƒ– ϐ‹” ϐ‹ƒ ‹ƒŽ ƒ””ƒ‰‡‡–• Šƒ˜‡ „‡‡ ƒ†‡ ˆ‘”
(REGULATION 30) ˆ—Žϐ‹ŽŽ‹‰–Š‡’ƒ›‡–‘„Ž‹‰ƒ–‹‘•—†‡”–Š‡†‡Ž‹•–‹‰‘ˆˆ‡”ƒ†–Šƒ––Š‡ƒ “—‹”‡”‹•ƒ„Ž‡–‘
implement the delisting offer, subject to any statutory approvals for the delisting offer that
may be necessary.
The acquirer shall ensure that the contents of the initial public announcement, the detailed
public announcement, the letter of offer and announcement about success or failure of the
offer for delisting are true, fair and adequate in all material aspects, not misleading and
based on reliable sources that shall be mentioned wherever necessary.
The acquirer and the persons acting in concert with it shall be jointly and severally
”‡•’‘•‹„Ž‡ˆ‘”–Š‡ˆ—Žϐ‹Ž‡–‘ˆ–Š‡ƒ’’Ž‹ ƒ„Ž‡‘„Ž‹‰ƒ–‹‘•—†‡”–Š‡•‡”‡‰—Žƒ–‹‘•Ǥ
The acquirer shall ensure to acquire the shares offered by the remaining public shareholders
at the same price at which the equity shares had been delisted for a minimum period of one year.
No acquirer or persons acting in concert with it shall sell shares of the company during the
delisting period.
 258 Lesson 8 • EP-SLCM

”‘ ‡†—”‡ˆ‘”‘Ž—–ƒ”›†‡Ž‹•–‹‰ˆ”‘ƒŽŽ–Š‡•–‘ ‡š Šƒ‰‡•

Initial Public Announcement [IPA] by the acquirer [Reg. 8]

Appointment of Manager prior to announcement [Reg. 9]

Approval by Board of Director [Reg. 10]

[Not later than 21 days from the date of IPA]

Approval by Shareholders [Reg. 11]

[Not later than 45 days of Board Resolution]

Application to relevant recognised stock exchange for in-principle approval of proposed delisting [Reg. 12]
[Not later than 15 days from the date of special Resolution OR receipt of other regulatory approval
whichever is later ]

Opening of Escrow Account [Reg.14]

[Not later than 7 working days from the date of Special Resolution]

Detailed Public Announcement [Reg. 15]

[Within 1 working day of receipt of in-principle approval from recognised stock exchange]

Dispatch of letter of offer [Reg. 16]

[Not later than 2 working days from the date of detailed public announcement, to the public shareholders]

Commencement of Bidding Mechanism[Reg. 17]

[Not later than 7 working days from the date of detailed public announcement-which shall
remain open for 5 working days]

Discovered price shall be determined through Reverse book Building [Reg. 20]

Counter offer by the acquirer [Reg.22]

[Within 2 working days of closure of bidding period]

Release of shares in case failure of offer[Reg. 23]

Payment to shareholders upon success of offer [Reg. 24]

Final Delisting Application to the stock exchange [Reg. 25]

[within in 5 working days from the date of making the payment to the public shareholders]

Delisting by the stock exchange

 Lesson 8 • SEBI (Delisting of Equity Shares) Regulations, 2021 259

COMPULSORY DELISTING
Compulsory delisting refers to permanent removal of securities of a listed company from a stock exchange as a
’‡ƒŽ‹œ‹‰ ‡ƒ•—”‡ ƒ– –Š‡ „‡Š‡•– ‘ˆ –Š‡ •–‘  ‡š Šƒ‰‡ ˆ‘” ‘– ƒ‹‰ •—„‹••‹‘•Ȁ ‘’Ž› ™‹–Š ˜ƒ”‹‘—•
requirements set out in the Listing agreement within the time frames prescribed.
As per Regulation 32(1) a recognized stock exchange may, by a reasoned order, delist any equity shares of a company
on any ground prescribed in the rules made under the Securities Contracts (Regulation) Act, 1956 .
However, no order of compulsory delisting shall be issued unless the company has been given a reasonable
opportunity of being heard.

Constitution of Panel [Regulation 32(2)]

The decision regarding compulsory delisting shall be taken by a panel to be constituted by the recognized stock
exchange consisting of -
a. Two Directors of the recognized stock exchange (one of whom shall be a public representative);
b. One representative of an investor association recognised by the SEBI;
c. One representative of the Ministry of Corporate Affairs or Registrar of Companies; and
d. The Executive Director or Secretary of the recognized stock exchange.

Public notice before delisting order [Regulation 32(3)]

Before passing an order, the recognised stock exchange shall give a notice in at least one English national newspaper
with wide circulation, one Hindi national newspaper with wide circulation in their all India editions and one
vernacular newspaper of the region where the relevant recognised stock exchange is located, of the proposed
†‡Ž‹•–‹‰ǡ ‰‹˜‹‰ ƒ –‹‡ ’‡”‹‘† ‘ˆ ‘– Ž‡•• –Šƒ ϐ‹ˆ–‡‡ ™‘”‹‰ †ƒ›• ˆ”‘ –Š‡ †ƒ–‡ ‘ˆ •— Š ‘–‹ ‡ǡ ™‹–Š‹ ™Š‹ Š
representations, if any, may be made to the recognised stock exchange by any person aggrieved by the proposed
delisting and shall also display such notice on its trading systems and website.
Time period of making representation [Regulation 32(3)]
‹‡’‡”‹‘†‘ˆ‘–Ž‡••–Šƒϐ‹ˆ–‡‡™‘”‹‰†ƒ›•ˆ”‘–Š‡†ƒ–‡‘ˆ•— Š‘–‹ ‡ǡ™‹–Š‹™Š‹ Š”‡’”‡•‡–ƒ–‹‘•ǡ‹ˆƒ›ǡ
may be made to the recognised stock exchange by any person aggrieved by the proposed delisting and shall also
display such notice on its trading systems and website.
‡Ž‹•–‹‰”†‡”„›–Š‡‡ ‘‰‹•‡†–‘ š Šƒ‰‡ȏ‡‰—Žƒ–‹‘͵ʹȋͶȌȐ
The recognised stock exchange shall, while passing any order of compulsory delisting, consider the representation,
if any, made by the company and also any representation received in response to the notice, and shall comply with
the guidelines provided in these regulations.
GUIDELINES FOR COMPULSORY DELISTING

The recognised stock exchange shall take into account the grounds prescribed in the
rules made under the Securities Contracts (Regulation) Act, 1956 while compulsorily
delisting the equity shares of the company.

The recognised stock exchange shall take all reasonable steps to trace the promoters of a
company whose equity shares are proposed to be delisted.

The recognised stock exchange shall consider the nature and extent of the alleged
noncompliance by the company and the number and percentage of public shareholders
who may be affected by such non-compliance.
 260 Lesson 8 • EP-SLCM

The recognised stock exchange shall take reasonable efforts to verify the status of compliance
with the provisions of the Companies Act, 2013 and the rules and regulations made
–Š‡”‡—†‡”ǡ„›–Š‡ ‘’ƒ›™‹–Š–Š‡‘ˆϐ‹ ‡‘ˆ–Š‡ ‘ ‡”‡†‡‰‹•–”ƒ”‘ˆ‘’ƒ‹‡•Ǥ

The names of the companies whose equity shares are proposed to be delisted and their
promoters shall be displayed in a separate section on the website of the recognised stock
exchange. If delisted, the names shall be shifted to another separate section on the website.

Š‡ ”‡ ‘‰‹•‡† •–‘  ‡š Šƒ‰‡ •ŠƒŽŽ ‹ ƒ’’”‘’”‹ƒ–‡ ƒ•‡• ϐ‹Ž‡ ’”‘•‡ —–‹‘• —†‡”
relevant provisions of the Securities Contracts (Regulation) Act, 1956 or any other law
ˆ‘”–Š‡–‹‡„‡‹‰‹ˆ‘” ‡ƒ‰ƒ‹•–‹†‡–‹ϐ‹ƒ„Ž‡’”‘‘–‡”•ƒ††‹”‡ –‘”•‘ˆ–Š‡ ‘’ƒ›
for the alleged non-compliances.

The recognised stock exchange shall, in appropriate cases, under the applicable
’”‘˜‹•‹‘• ‘ˆ –Š‡ ‘’ƒ‹‡•  –ǡ ʹͲͳ͵ǡ ϐ‹Ž‡ ƒ ’‡–‹–‹‘ ˆ‘” ™‹†‹‰ —’ –Š‡ ‘’ƒ› ‘”
make a request to the Registrar of Companies to strike off the name of the company from
the register.

Public notice after Delisting Order [Regulation 32 (5)]

Where the recognized stock exchange passes the delisting order, it shall, -
(a) forthwith publish a notice in one English national newspaper with wide circulation, one Hindi national
newspaper with wide circulation in their all India editions and one vernacular newspaper of the region where
the relevant recognised stock exchange is located.
The following disclosures are to be made in the notice –
• The fact of such delisting;
• The name and address of the company;
• The fair value of the delisted equity shares; and
• The names and addresses of the promoters of the company who would be liable under sub-regulation (4)
of regulation 33 of these regulations.
(b) inform all other stock exchanges where the equity shares of the company are listed, about such delisting; and
(c) upload a copy of the said order on its website.
Rights of public shareholders in case of compulsory delisting (Regulation 33)
Where the equity shares of a company are compulsorily delisted by a recognised stock exchange, the recognised
stock exchange shall appoint an independent valuer who shall determine the fair value of the delisted equity shares.
The recognised stock exchange shall form a Panel of expert valuers and from the said Panel, the valuer shall be
appointed. The value of the delisted equity shares shall be determined by the valuer as prescribed.
The promoter of the company shall acquire the delisted equity shares from the public shareholders by paying them
the value determined by the valuer, within three months of the date of delisting from the recognised stock exchange,
subject to the option of the public shareholders to retain their shares.
The promoter shall be liable to pay interest at the rate of ten percent per annum to all the shareholders, who offer
their shares under the compulsory delisting offer, if the price payable is not paid to all the shareholders within the
–‹‡•’‡ ‹ϐ‹‡†Ǥ
 Lesson 8 • SEBI (Delisting of Equity Shares) Regulations, 2021 261

However, in case the delay was not attributable to any act or omission of the acquirer or was caused due to the
circumstances beyond the control of the acquirer, the SEBI may grant waiver from the payment of such interest.

CONSEQUENCES OF COMPULSORY DELISTING

Where a company has been compulsorily delisted, the company, its whole-time directors, persons responsible for
ensuring compliance with the securities laws, its promoters and the companies which are promoted by any of them
shall not directly or indirectly access the securities market or seek listing of any equity shares or act as an
intermediary in the securities market for a period of 10 years from the date of such delisting.

Procedure for Compulsory Delisting

Constitution of Panel by Recognised stock exchange to take decision regarding the

compulsory delisting by the exchange

Public notice of compulsory delisting by recognized stock exchange in one English

national, one Hindi national and one vernacular newspaper of the region where the
relevant recognized stock exchange is located

The recognised stock exchange shall give above mentioned notice giving a time
period of not less than 15 working days from the date of such notice, within which
representations may be made to the recognised stock exchange by any person
aggrieved by the proposed delisting

Delisting order by the recognized stock exchange

Public notice after delisting order by recognized stock exchange in one English
national, one Hindi national and one vernacular newspaper of the region where the
relevant recognized stock exchanges is located, of the fact of such delisting and
information to all the stock exchanges where the equity shares of the company
listed and also on its website

Appointment of independent Valuer

Determination of the fair value of the delisted equity shares by the Independent
valuers appointed by the recognized stock exchange

Acquisition of shares by the promoters from the public shareholders at determined

fair value

‘’ƒ›Ȁ™Š‘Ž‡Ǧ–‹‡†‹”‡ –‘”•Ȁ’‡”•‘•”‡•’‘•‹„Ž‡ˆ‘”‡•—”‹‰ ‘’Ž‹ƒ ‡

™‹–Š–Š‡•‡ —”‹–‹‡•Žƒ™•Ȁ”‘‘–‡”• ƒ‡‹–Š‡”ƒ ‡•••‡ —”‹–‹‡•ƒ”‡–‘”•‡‡
listing for a period of 10 years
 262 Lesson 8 • EP-SLCM

SPECIAL PROVISIONS FOR DELISTING

Delisting of equity shares of small Companies (Regulation 35)

Equity shares of a company may be delisted from all the recognised stock exchanges where they are listed, without
following the procedure in Chapter IV (Exit Opportunity) of these regulations, if,-

the company has a paid the number of equity shares of the company has not
up capital not exceeding the company traded on each been suspended by any
10 crore rupees and net such recognised stock exchange of the recognised
worth not exceeding 25 during the 12 calendar months stock exchanges having
crore rupees as on the immediately receding the date nationwide trading
last date of preceding of board meeting held for terminals for any non-
ϐ‹ƒ ‹ƒŽ›‡ƒ” consideration of the proposal compliance in the
‘ˆ†‡Ž‹•–‹‰ǡ‹•Ž‡••–ŠƒͳͲΨ‘ˆ preceding one year
the total number of shares of
the company

Delisting of‡“—‹–›•Šƒ”‡•ƒ›„‡ƒ†‡‹ˆǡ‹ƒ††‹–‹‘–‘ˆ—Žϐ‹Ž‡–‘ˆ–Š‡”‡“—‹”‡‡–•‘ˆ”‡‰—Žƒ–‹‘ͳͲȋ’’”‘˜ƒŽ
„›–Š‡‘ƒ”†‘ˆ‹”‡ –‘”•Ȍƒ†”‡‰—Žƒ–‹‘ͳͳȋ’’”‘˜ƒŽ„›•Šƒ”‡Š‘Ž†‡”•Ȍǡ–Š‡ˆ‘ŽŽ‘™‹‰ ‘†‹–‹‘•ƒ”‡ˆ—Žϐ‹ŽŽ‡†ǣǦ
(a) acquirer appoints a Manager to the offer and decides an exit price after consultation;
ȋ„Ȍ –Š‡‡š‹–’”‹ ‡‘ˆˆ‡”‡†–‘–Š‡’—„Ž‹ •Šƒ”‡Š‘Ž†‡”••ŠƒŽŽ‘–„‡Ž‡••–Šƒ–Š‡ϐŽ‘‘”’”‹ ‡†‡–‡”‹‡†‹–‡”•‘ˆ
clause (e) of sub-regulation (2) of regulation 8 of the Takeover Regulations;
(c) the acquirer writes individually to all the public shareholders of the company informing them of its intention
–‘ ‰‡– –Š‡ ‡“—‹–› •Šƒ”‡• †‡Ž‹•–‡†ǡ –Š‡ ‡š‹– ’”‹ ‡ –‘‰‡–Š‡” ™‹–Š –Š‡ Œ—•–‹ϐ‹ ƒ–‹‘ –Š‡”‡ˆ‘” ƒ† •‡‡‹‰ –Š‡‹”
consent for the proposal for delisting;
(d) the public shareholders, irrespective of their numbers, holding ninety percent or more of the public
shareholding give their consent in writing to the proposal for delisting, and consent either to sell their equity
shares at the price offered by the acquirer or to continue to hold the equity shares even if they are delisted;
ȋ‡Ȍ –Š‡ ƒ “—‹”‡” ‘’Ž‡–‡• –Š‡ ’”‘ ‡•• ‘ˆ ‹˜‹–‹‰ –Š‡ ’‘•‹–‹˜‡ ‘•‡– ƒ† ϐ‹ƒŽ‹•ƒ–‹‘ ‘ˆ –Š‡ ’”‘’‘•ƒŽ ˆ‘”
†‡Ž‹•–‹‰‘ˆ‡“—‹–›•Šƒ”‡•™‹–Š‹•‡˜‡–›ϐ‹˜‡™‘”‹‰†ƒ›•‘ˆ–Š‡ϐ‹”•– ‘—‹ ƒ–‹‘ƒ†‡—†‡” Žƒ—•‡ȋ ȌǢ
ȋˆȌ –Š‡ƒ “—‹”‡”ƒ‡•’ƒ›‡–‘ˆ ‘•‹†‡”ƒ–‹‘‹ ƒ•Š™‹–Š‹ϐ‹ˆ–‡‡™‘”‹‰†ƒ›•ˆ”‘–Š‡†ƒ–‡‘ˆ‡š’‹”›‘ˆ
•‡˜‡–›ϐ‹˜‡™‘”‹‰†ƒ›•‡–‹‘‡†‹ Žƒ—•‡ȋ‡ȌǤ

Š‡ ‘—‹ ƒ–‹‘ƒ†‡–‘–Š‡’—„Ž‹ •Šƒ”‡Š‘Ž†‡”•—†‡” Žƒ—•‡ȋ Ȍ•ŠƒŽŽ ‘–ƒ‹Œ—•–‹ϐ‹ ƒ–‹‘ˆ‘”–Š‡‘ˆˆ‡”’”‹ ‡

ƒ†•’‡ ‹ϐ‹ ƒŽŽ›‡–‹‘–Šƒ– ‘•‡–ˆ‘”–Š‡’”‘’‘•ƒŽ™‘—Ž†‹ Ž—†‡ ‘•‡–ˆ‘”†‹•’‡•‹‰™‹–Š–Š‡‡š‹–’”‹ ‡
discovery through reverse book building method.
The acquirer shall be liable to pay interest at the rate of ten percent per annum to all the shareholders, whose bids
Šƒ˜‡„‡‡ƒ ‡’–‡†‹–Š‡†‡Ž‹•–‹‰‘ˆˆ‡”ǡ‹•‘–’ƒ‹†–‘ƒŽŽ–Š‡•Šƒ”‡Š‘Ž†‡”•™‹–Š‹–Š‡–‹‡•’‡ ‹ϐ‹‡†–Š‡”‡—†‡”Ǥ
However, in case the delay was not attributable to any act or omission of the acquirer or was caused due to the
circumstances beyond the control of the acquirer, the SEBI may grant waiver from the payment of such interest.
The relevant recognised stock exchange may delist such equity shares upon satisfying itself of compliance with this
regulation.
 Lesson 8 • SEBI (Delisting of Equity Shares) Regulations, 2021 263

Delisting of Equity Shares of Companies Listed on Innovators Growth Platform after making an Initial
Public Offer (Regulation 36)
A company whose equity shares are listed and traded on the innovators growth platform pursuant to an initial
public offer may be delisted from the innovators growth platform, if –
(a) such delisting is approved by the Board of Directors of the company;
(b) such delisting is approved by the shareholders of the company by a special resolution passed through postal
ballot or e-voting, after disclosure of all material facts in the explanatory statement sent to the shareholders
in relation to such resolution. However, the special resolution shall be acted upon only if the votes cast by the
majority of public shareholders are in favour of such exit proposal;
ȋ Ȍ †‡Ž‹•–‹‰’”‹ ‡‹•„ƒ•‡†‘ƒϐŽ‘‘”’”‹ ‡†‡–‡”‹‡†‹–‡”•‘ˆ”‡‰—Žƒ–‹‘ͺ‘ˆƒ‡‘˜‡”‡‰—Žƒ–‹‘•ǡƒ•ƒ›
„‡ƒ’’Ž‹ ƒ„Ž‡ǡƒ†ƒƒ††‹–‹‘ƒŽ†‡Ž‹•–‹‰’”‡‹—Œ—•–‹ϐ‹‡†„›–Š‡ƒ “—‹”‡”Ǣ
(d) the post offer shareholding of the acquirer along with the persons acting in concert with it, taken together
™‹–Š–Š‡•Šƒ”‡•–‡†‡”‡†”‡ƒ Š‡••‡˜‡–›ϐ‹˜‡’‡” ‡–‘ˆ–Š‡–‘–ƒŽ‹••—‡†•Šƒ”‡•‘ˆ–Šƒ– Žƒ••ƒ†ƒ–Ž‡ƒ•–ϐ‹ˆ–›
per cent shares of the public shareholders as on date of the board meeting are tendered and accepted; and
(e) the recognised stock exchange, on which its shares are listed, approves of such delisting.

‡Ž‹•–‹‰‹ ƒ•‡‘ˆ™‹†‹‰—’‘ˆƒ ‘’ƒ›ƒ††‡Ǧ”‡ ‘‰‹–‹‘‘ˆƒ•–‘ ‡š Šƒ‰‡

In case of winding up proceedings of a company whose equity shares are listed on a recognised stock exchange,
the rights, if any, of the shareholders of such company shall be in accordance with the laws applicable to those
proceedings. Where the SEBI withdraws recognition granted to a stock exchange or refuses renewal of
recognition to it, the SEBI may, in the interest of investors pass appropriate order in respect of the status of
equity shares of the companies listed on that stock exchange.

Question:
Š‡‡“—‹–›Šƒ”‡•‘ˆŽ‹‹–‡†Šƒ˜‡„‡‡†‡Ž‹•–‡†ˆ”‘–Š‡•–‘ ‡š Šƒ‰‡ǤŠ‡ ƒƒƒ’’Ž‹ ƒ–‹‘
be made for listing of equity sahres of XYZ limited?
Answer:
No application for listing shall be made in respect of equity shares of a company which have been delisted under
Chapter III (Voluntary Delisting) or under Chapter VI (Exit Opportunity in case delisting of equity shares of a
company from all the recognised stock exchanges), for a period of 3 years from the delisting and which have
been delisted under Chapter V (Compulsory Delisting), for a period of 10 years from the delisting, except the
following:
(a) whose equity shares have been delisted pursuant to a resolution plan under section 31 of the Insolvency
Code;
(b) whose equity shares are listed and traded on the innovators growth platform pursuant to an initial public
offer and which is delisted from the said platform;
(c) whose equity shares have been delisted in terms of regulation 35 (Delisting of equity shares of small
companies).

POWER OF SEBI TO RELAX STRICT ENFORCEMENT OF THE REGULATIONS (REGULATION 42)

The SEBI may, in the interest of investors or for the development of the securities market, relax the strict enforcement
‘ˆƒ›”‡“—‹”‡‡–‘ˆ–Š‡•‡”‡‰—Žƒ–‹‘•ǡ‹ˆ–Š‡ ‹••ƒ–‹•ϐ‹‡†–Šƒ–Ǧ
a) the requirement is procedural in nature; or
b) any disclosure requirement is not relevant for a particular class of industry or company; or
 264 Lesson 8 • EP-SLCM

c) the non-compliance was caused due to factors beyond the control of the acquirer.

‘” •‡‡‹‰ ƒ„‘˜‡ ‡–‹‘‡† ”‡Žƒšƒ–‹‘ǡ –Š‡ ƒ “—‹”‡” ‘” –Š‡ ‘’ƒ› •ŠƒŽŽ ϐ‹Ž‡ ƒ ƒ’’Ž‹ ƒ–‹‘ ™‹–Š –Š‡  ǡ
•—’’‘”–‡† „› ƒ †—Ž› •™‘” ƒˆϐ‹†ƒ˜‹–ǡ ’”‘˜‹†‹‰ †‡–ƒ‹Ž• ‘ˆ •— Š ”‡Žƒšƒ–‹‘ ‘ˆ –Š‡ ”‡‰—Žƒ–‹‘• ƒ† –Š‡ ‰”‘—†• ‘
which the relaxation has been sought and pay a non-refundable fee of rupees one lakh along with the application.
Further, the SEBI may also exempt any person or class of persons from the operation of all or any of the provisions
‘ˆ–Š‡•‡”‡‰—Žƒ–‹‘•ˆ‘”ƒ’‡”‹‘†ƒ•ƒ›„‡•’‡ ‹ϐ‹‡†„—–‘–‡š ‡‡†‹‰–™‡Ž˜‡‘–Š•ǡˆ‘”ˆ—”–Š‡”‹‰‹‘˜ƒ–‹‘
relating to testing new products, processes, services, business models, etc. in live environment of regulatory sandbox
in the securities markets.
Explanation,- For the purposes of these regulations, “regulatory sandbox” means a live testing environment where
new products, processes, services, business models, etc. may be deployed on a limited set of eligible customers for
ƒ•’‡ ‹ϐ‹‡†’‡”‹‘†‘ˆ–‹‡ǡˆ‘”ˆ—”–Š‡”‹‰‹‘˜ƒ–‹‘‹–Š‡•‡ —”‹–‹‡•ƒ”‡–ǡ•—„Œ‡ ––‘•— Š ‘†‹–‹‘•ƒ•ƒ›„‡
•’‡ ‹ϐ‹‡†„›–Š‡‘ƒ”†Ǥ
ROLE OF COMPANY SECRETARY IN DELISTING
The Board of Directors of the company, before considering the proposal of delisting, shall appoint a Peer Review
Company Secretary, who shall carry out the due-diligence and submit a report to the Board of Directors of the
company certifying that the buying, selling and dealing in the equity shares of the company carried out by the
ƒ “—‹”‡”‘”‹–•”‡Žƒ–‡†‡–‹–‹‡•ƒ†–Š‡–‘’–™‡–›ϐ‹˜‡•Šƒ”‡Š‘Ž†‡”•‹•‹ ‘’Ž‹ƒ ‡™‹–Š–Š‡ƒ’’Ž‹ ƒ„Ž‡’”‘˜‹•‹‘•
of securities laws including compliance with these regulations.
The SEBI has widen the area of responsibilities of a Company Secretary by mandating a listed company to appoint
‘’ƒ›‡ ”‡–ƒ”›–‘ƒ –ƒ• ‘’Ž‹ƒ ‡‘ˆϐ‹ ‡”—†‡”–Š‡ ȋȌ‡‰—Žƒ–‹‘•Ǥ‡‹‰ƒ ‘’Ž‹ƒ ‡‘ˆϐ‹ ‡”ǡ‹–‹•
the responsibility of a Company Secretary to look after and ensure timely compliances of various SEBI regulations.
In case of non-compliance with the listing regulation a stock exchange may delist the securities of a company.
Apart from this, a Company Secretary has to appoint and co-ordinate with various intermediaries, regulators, etc.
and advise the Board of Directors, the various requirements of Delisting.

LESSON ROUND-UP

• Delisting of securities 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 traded at that stock exchange.
• Delisting can be voluntary or compulsory.
•  Šƒ•‘–‹ϐ‹‡†–Š‡ ȋ‡Ž‹•–‹‰‘ˆ“—‹–›Šƒ”‡•Ȍ‡‰—Žƒ–‹‘•ǡʹͲʹͳ„›‹–•‘–‹ϐ‹ ƒ–‹‘†ƒ–‡† —‡
10, 2021.
• The delisting regulations are applicable to delisting of equity shares of a company from all or any of the
recognised stock exchanges where such shares are listed.
• SEBI (Delisting of Equity Shares) Regulations, 2021 provides the special provisions for small companies,
companies listed on innovators growth platform and for delisting by operation of law.
• There are certain circumstances as prescribed by the SEBI where delisting is not permissible.
• In voluntary delisting, a company decides its own to permanently remove its securities from stock exchange.
• A recognised stock exchange may by order delist any equity shares of a company on any grounds
prescribed under the Securities Contracts (Regulation) Act, 1956.
• When a company has been compulsorily delisted the company, its whole-time directors, persons
responsible for ensuring compliance with the securities laws, its promoters and the companies which are
promoted by any of them shall not directly or indirectly access the securities market or seek listing of any
equity shares or act as an intermediary in the securities market for a period of ten years from the date of
such delisting.
Lesson 8 • SEBI (Delisting of Equity Shares) Regulations, 2021 265

GLOSSARY

Bid An offer of a price to buy it as an auction. Business on the stock exchange is done
through bids. Bid also refers to the price one is willing to pay.
‡Ž‹•–‹‰š Šƒ‰‡ The exchange from which securities of a company are proposed to be delisted.
Offer Price Price at which units in trust can be bought it often includes an entry fee. It also refers
to the price at which securities are offered to the public.
Public Public means persons other than, the promoter and promoter group; subsidiaries and
associates of the company.
Public Shareholding Means equity shares of the company held by public including shares underlying the
depository receipts if the holder of such depository receipts has the right to issue
voting instruction and such depository receipts are listed on an international exchange
in accordance with the Depository Receipts Scheme, 2014.
Working Days It means the working days of the SEBI.

TEST YOURSELF

(These are meant for recapitulation only. Answer to these questions are not to be submitted for evaluation)
1. Discuss the conditions and procedure for delisting where exit opportunity is required.
2. Explain the conditions for delisting under SEBI (Delisting of Equity Shares) Regulations, 2021.
3. Can cash component of the escrow account in the delisting offer process be maintained in an interest
bearing account?
4. What are the rights of public shareholders in case of compulsory delisting of securities?
5. Write a note on the following-
a. Obligations of the Manager to the offer
b. Discovered Price
c. Counter Offer
d. Public announcement in Voluntary Delisting from all the Stock Exchanges
6. Hawai Ltd. is public company with a paid-up share capital of Rs.8 crores as per the latest audited balance
sheet. The net worth of the company for the year 2020-21 was 22 crores. The company is listed on Bombay
Stock Exchange (BSE). The Board plans for the delisting of its Equity Shares from the exchange. As a
Company Secretary, advice the Board.