On June 10, 2021, the Securities and Exchange Board of India (SEBI) has issued the Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2021.
Applicability: The Regulations apply to delisting of equity shares of a company including equity shares having superior voting rights from all or any of the recognised stock exchanges where such shares are listed.
Conditions for Delisting:
- Neither any company shall apply for nor any recognised stock exchange shall permit delisting of equity shares of a company:-
(a) unless a period of three years has elapsed since the listing of that class of equity shares on any recognised stock exchange;
(b) if any instrument issued by the company, which is convertible into the same class of equity share(s) that is sought to be delisted, is outstanding;
(c) pursuant to a buyback of equity shares by the company, including a buyback pursuant to consolidation or division of all or part of the equity share capital of the company, unless a period of six months has elapsed from the date of completion of such buyback;
(d) pursuant to a preferential allotment made by the company unless a period of six months has elapsed from the date of such allotment.
2. No acquirer shall propose delisting of equity shares of a company, if the acquirer had sold the equity shares of the company during the period of six months prior to the date of the initial public announcement.
Delisting from some of the recognised stock exchanges
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.
Delisting from all the recognised stock exchanges
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.
Read more about the Regulations HERE