Sebi Eases Delisting Rules with New Fixed Price Mechanism

The Securities and Exchange Board of India (Sebi) has introduced new regulations allowing companies to delist shares through a fixed price mechanism, offering an alternative to the reverse book building process. This change aims to simplify the delisting process for frequently traded shares and provides modifications to counter-offer and threshold requirements.

The Securities and Exchange Board of India (Sebi) has rolled out new rules enabling companies to delist their shares via a fixed price mechanism, a move poised to streamline the delisting process for listed firms. This presents an alternative to the existing reverse book building (RBB) process.

Previously, companies had to initiate delisting via a public announcement, adhering to minimum floor price rules. With the new fixed price mechanism, acquirers must offer at least a 15% premium over the floor price. Additionally, changes to the counter-offer mechanism and threshold requirements have been introduced to simplify the process further.

Sebi's updated delisting regulations also include an alternate framework for listed Investment Holding Companies (IHC), offering greater flexibility in delisting procedures while ensuring compliance with financial sector regulations. These changes are targeted at improving the ease of doing business for publicly traded companies in India.

(With inputs from agencies.)