{"id":6120,"date":"2019-08-28T18:34:52","date_gmt":"2019-08-28T13:04:52","guid":{"rendered":"https:\/\/swaritadvisors.com\/learning\/?p=6120"},"modified":"2020-04-18T15:32:22","modified_gmt":"2020-04-18T10:02:22","slug":"procedure-for-delisting-of-equity-shares-on-stock-exchange","status":"publish","type":"post","link":"https:\/\/swaritadvisors.com\/learning\/procedure-for-delisting-of-equity-shares-on-stock-exchange\/","title":{"rendered":"Procedure for Delisting of Equity Shares on Stock Exchange"},"content":{"rendered":"\n<p class=\"has-drop-cap\">Delisting of Equity Shares means the permanent removal of shares of a listed company from any of the stock exchange where it is listed. The public company grows and develops by utilizing the capital of public shareholding. <\/p>\n\n\n\n<p>The\nhighest risk is with bottom players of pyramids who are Equity shareholders.\nThe primary reason to take up this risk is that the listed companies provide an\neasy way of quieting from the market because the shares can be sold in the\nsecondary market. <\/p>\n\n\n\n<p>Listed\ncompanies have a lot of compliances and the market regulations are strict\nenough to facilitate safeguarding shareholders\u2019 interests against unfair\npractices. Whenever a company decides to go corporate privatization,\nshareholders are exposed to risk position since the available market in the\nform of a stock exchange is being taken away. <\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_65 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a3b4c381e0bf\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a3b4c381e0bf\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/swaritadvisors.com\/learning\/procedure-for-delisting-of-equity-shares-on-stock-exchange\/#Meaning_of_%E2%80%9CDelisting_of_Equity_Shares%E2%80%9D\" title=\"Meaning of\n\u201cDelisting of Equity Shares\u201d\">Meaning of\n\u201cDelisting of Equity Shares\u201d<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/swaritadvisors.com\/learning\/procedure-for-delisting-of-equity-shares-on-stock-exchange\/#Statutory_provisions_for_regulating_the_public_issue\" title=\"Statutory provisions for regulating the public issue\">Statutory provisions for regulating the public issue<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/swaritadvisors.com\/learning\/procedure-for-delisting-of-equity-shares-on-stock-exchange\/#Types_of_Delisting\" title=\"Types of Delisting\">Types of Delisting<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/swaritadvisors.com\/learning\/procedure-for-delisting-of-equity-shares-on-stock-exchange\/#1_Voluntary_Delisting\" title=\"1)&nbsp;&nbsp;&nbsp;&nbsp; Voluntary Delisting\">1)&nbsp;&nbsp;&nbsp;&nbsp; Voluntary Delisting<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/swaritadvisors.com\/learning\/procedure-for-delisting-of-equity-shares-on-stock-exchange\/#a_Board_Meeting\" title=\"a)&nbsp;&nbsp;\nBoard Meeting\">a)&nbsp;&nbsp;\nBoard Meeting<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/swaritadvisors.com\/learning\/procedure-for-delisting-of-equity-shares-on-stock-exchange\/#b_Intimation_to_the_stock_exchange\" title=\"b)&nbsp;&nbsp;\nIntimation to\nthe stock exchange\">b)&nbsp;&nbsp;\nIntimation to\nthe stock exchange<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/swaritadvisors.com\/learning\/procedure-for-delisting-of-equity-shares-on-stock-exchange\/#c_Pass_the_necessary_Special_Resolution\" title=\"c)&nbsp;&nbsp;&nbsp;\nPass the\nnecessary Special Resolution\">c)&nbsp;&nbsp;&nbsp;\nPass the\nnecessary Special Resolution<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/swaritadvisors.com\/learning\/procedure-for-delisting-of-equity-shares-on-stock-exchange\/#d_Application_for_In-Principal_approval\" title=\"d)&nbsp;&nbsp;\nApplication for\nIn-Principal approval\">d)&nbsp;&nbsp;\nApplication for\nIn-Principal approval<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/swaritadvisors.com\/learning\/procedure-for-delisting-of-equity-shares-on-stock-exchange\/#e_In-Principal_Approval\" title=\"e)&nbsp;&nbsp;\nIn-Principal Approval\">e)&nbsp;&nbsp;\nIn-Principal Approval<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/swaritadvisors.com\/learning\/procedure-for-delisting-of-equity-shares-on-stock-exchange\/#f_Merchant_Banker\" title=\"f)&nbsp;&nbsp;&nbsp;&nbsp;\nMerchant Banker\">f)&nbsp;&nbsp;&nbsp;&nbsp;\nMerchant Banker<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/swaritadvisors.com\/learning\/procedure-for-delisting-of-equity-shares-on-stock-exchange\/#g_Fixation_of_the_floor_price\" title=\"g)&nbsp;&nbsp; Fixation of the floor price \">g)&nbsp;&nbsp; Fixation of the floor price <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/swaritadvisors.com\/learning\/procedure-for-delisting-of-equity-shares-on-stock-exchange\/#h_Opening_of_an_Escrow_Account\" title=\"h)&nbsp;&nbsp;\nOpening of an\nEscrow Account\">h)&nbsp;&nbsp;\nOpening of an\nEscrow Account<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/swaritadvisors.com\/learning\/procedure-for-delisting-of-equity-shares-on-stock-exchange\/#i_Public_announcement\" title=\"i)&nbsp;&nbsp;&nbsp;&nbsp;\nPublic\nannouncement\">i)&nbsp;&nbsp;&nbsp;&nbsp;\nPublic\nannouncement<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/swaritadvisors.com\/learning\/procedure-for-delisting-of-equity-shares-on-stock-exchange\/#j_Specified_date\" title=\"j)&nbsp;&nbsp;&nbsp;&nbsp;\nSpecified date \">j)&nbsp;&nbsp;&nbsp;&nbsp;\nSpecified date <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/swaritadvisors.com\/learning\/procedure-for-delisting-of-equity-shares-on-stock-exchange\/#k_Dispatch_Letter_of_Offer\" title=\"k)&nbsp;&nbsp;\nDispatch Letter\nof Offer \">k)&nbsp;&nbsp;\nDispatch Letter\nof Offer <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/swaritadvisors.com\/learning\/procedure-for-delisting-of-equity-shares-on-stock-exchange\/#l_Duration_of_the_Bidding_period\" title=\"l)&nbsp;&nbsp;&nbsp;&nbsp; Duration of the Bidding period \">l)&nbsp;&nbsp;&nbsp;&nbsp; Duration of the Bidding period <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-17\" href=\"https:\/\/swaritadvisors.com\/learning\/procedure-for-delisting-of-equity-shares-on-stock-exchange\/#m_Public_announcement\" title=\"m)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;\nPublic\nannouncement \">m)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;\nPublic\nannouncement <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-18\" href=\"https:\/\/swaritadvisors.com\/learning\/procedure-for-delisting-of-equity-shares-on-stock-exchange\/#n_Successful_offer\" title=\"n)&nbsp; Successful offer \">n)&nbsp; Successful offer <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-19\" href=\"https:\/\/swaritadvisors.com\/learning\/procedure-for-delisting-of-equity-shares-on-stock-exchange\/#o_Final_price\" title=\"o)&nbsp;&nbsp;\nFinal price\">o)&nbsp;&nbsp;\nFinal price<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-20\" href=\"https:\/\/swaritadvisors.com\/learning\/procedure-for-delisting-of-equity-shares-on-stock-exchange\/#p_The_final_application_to_the_stock_exchange\" title=\"p)&nbsp;&nbsp;\nThe final application\nto the stock exchange\">p)&nbsp;&nbsp;\nThe final application\nto the stock exchange<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-21\" href=\"https:\/\/swaritadvisors.com\/learning\/procedure-for-delisting-of-equity-shares-on-stock-exchange\/#2_Compulsory_Delisting\" title=\"2)&nbsp;&nbsp;&nbsp;&nbsp; Compulsory Delisting\">2)&nbsp;&nbsp;&nbsp;&nbsp; Compulsory Delisting<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-22\" href=\"https:\/\/swaritadvisors.com\/learning\/procedure-for-delisting-of-equity-shares-on-stock-exchange\/#Why_does_the_company_opt_for_Voluntary_Delisting\" title=\"Why does the company opt for Voluntary Delisting?\">Why does the company opt for Voluntary Delisting?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-23\" href=\"https:\/\/swaritadvisors.com\/learning\/procedure-for-delisting-of-equity-shares-on-stock-exchange\/#Conclusion\" title=\"Conclusion\">Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Meaning_of_%E2%80%9CDelisting_of_Equity_Shares%E2%80%9D\"><\/span>Meaning of\n\u201cDelisting of Equity Shares\u201d<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Delisting\nmeans the shares listed on a stock exchange will no longer be traded in the\nstock market and the company becomes a private company. It is also known as the\n&#8220;reverse book building process&#8221; since it&#8217;s a reverse procedure of\nlisting. <\/p>\n\n\n\n<p>Delisting\nmeans the permanent delist of securities from the stock market. Delisting is an\nentirely different concept from suspension or withdrawal of admission to\ndealing with listed shares. <\/p>\n\n\n\n<div class=\"browse\">\n<p>Browse through our articles on services provided at <a href=\"https:\/\/swaritadvisors.com\">Swarit Advisors<\/a>, and just let us know if we can help you with your IPO or Comapny Takeover or SEBI Advisory Services.<\/p>\n<div class=\"browse1\">\n<table class=\"table1\">\n\n<tbody>\n<tr>\n<td><a href=\"https:\/\/swaritadvisors.com\/mergers-and-acquisitions\"><span>Mergers and Acquisitions<\/a>&nbsp;<\/span><\/td>\n<td><a href=\"https:\/\/swaritadvisors.com\/buyback-of-shares\"><span>Buyback of Shares<\/span><\/a><\/td>\n<td><a href=\"https:\/\/swaritadvisors.com\/merger-and-amalgamation\"><span>Merger and Amalgamation<\/span><\/a><\/td>\n<\/tr>\n<tr>\n<td><a href=\"https:\/\/swaritadvisors.com\/public-issues\"><span>Public Issues<\/span><\/a><\/td>\n<td><a href=\"https:\/\/swaritadvisors.com\/rights-issue\"><span>Rights Issue<\/span><\/a><\/td>\n<td><a href=\"https:\/\/swaritadvisors.com\/preferential-allotment\"><span>Preferential Allotment<\/span><\/a><\/td>\n<\/tr>\n<tr>\n<td><a href=\"https:\/\/swaritadvisors.com\/company-takeover\"><span>Company Takeover<\/span><\/a><\/td>\n<td><a href=\"https:\/\/swaritadvisors.com\/issue-of-debentures\"><span>Issue of Debentures<\/span><\/a><\/td>\n<td><a href=\"https:\/\/swaritadvisors.com\/insurance-broker-license\"><span>Insurance Broker License<\/span><\/a><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/table>\n<\/div>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Statutory_provisions_for_regulating_the_public_issue\"><\/span>Statutory provisions for regulating the public issue<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Delisting\nof securities is governed by Chapter III, IV and Schedule II of SEBI (Delisting\nof Equity Shares) Regulations, 2009 and SEBI (Delisting of equity shares)\n(Amendment) Regulations, 2015.&nbsp; <\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Types_of_Delisting\"><\/span>Types of Delisting<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>There are two types of delisting with different procedure from each other:<\/p>\n\n\n\n<ol><li><strong>Voluntary\nDelisting:<\/strong> when a listed company seeks for delisting of\nits shares from the stock exchange voluntarily.<\/li><li><strong>Compulsory\nDelisting:<\/strong> when a listed company is compelled by a stock\nexchange to delist its shares. <\/li><\/ol>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"1_Voluntary_Delisting\"><\/span>1)&nbsp;&nbsp;&nbsp;&nbsp; Voluntary Delisting<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Following\nare the step by step procedure for delisting:<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"a_Board_Meeting\"><\/span>a)&nbsp;&nbsp;\nBoard Meeting<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>Call\n&amp; hold the meeting &amp; pass the necessary resolution of the approval of\ndelisting of security from the stock exchange.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"b_Intimation_to_the_stock_exchange\"><\/span>b)&nbsp;&nbsp;\nIntimation to\nthe stock exchange<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>Inform the stock exchange about the decision of the board meeting for approving the delisting of equity shares.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"c_Pass_the_necessary_Special_Resolution\"><\/span>c)&nbsp;&nbsp;&nbsp;\nPass the\nnecessary Special Resolution<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>Prior\napproval of all the shareholders must be taken by SR passed through postal\nballot, disclosing all the material facts of delisting. Resolution is said to\nbe passed if votes for the resolution is two times the number of votes cast\nagainst it.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"d_Application_for_In-Principal_approval\"><\/span>d)&nbsp;&nbsp;\nApplication for\nIn-Principal approval<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>The company needs to apply as per the prescribed form for\nseeking in-principal approval from the stock exchange. <\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"e_In-Principal_Approval\"><\/span>e)&nbsp;&nbsp;\nIn-Principal Approval<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>The recognized stock exchange needs to dispose of with an application within 5 days of receipt of an application &amp; shall grant in-principal approval after considering &amp; being satisfied with the following grounds:<\/p>\n\n\n\n<ul><li>Resolution of all the\ngrievances filed by an investors<\/li><li>Payment of listing fees<\/li><li>Compliance of listing agreement<\/li><\/ul>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"f_Merchant_Banker\"><\/span>f)&nbsp;&nbsp;&nbsp;&nbsp;\nMerchant Banker<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>The\npromoter has to appoint one merchant banker registered with SEBI or any such\nother intermediary.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"g_Fixation_of_the_floor_price\"><\/span>g)&nbsp;&nbsp; Fixation of the floor price <span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>Fix\nthe floor price after determining the offer price through the book building\nmethod. <\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"h_Opening_of_an_Escrow_Account\"><\/span>h)&nbsp;&nbsp;\nOpening of an\nEscrow Account<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>The\npromoter needs to open an escrow account and deposit the amount of\nconsideration based on floor price &amp; a number of equity shares outstanding\nwith public shareholders. <\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"i_Public_announcement\"><\/span>i)&nbsp;&nbsp;&nbsp;&nbsp;\nPublic\nannouncement<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>Promoter\nwithin one working day from getting in-principal approval from stock exchange\nshall make a public announcement in one English, one Hindi &amp; one vernacular\nlanguage newspaper of the region where the recognized stock exchange is located\nwith following material information:<\/p>\n\n\n\n<ul><li>Floor price<\/li><li>Offer price<\/li><li>Opening &amp; closing dates of\nan offer<\/li><li>Manner of accepting an offer<\/li><li>Name of the stock exchange from\nwhere shares are delisted<\/li><li>Minimum acceptance conditions<\/li><li>Name &amp; details of merchant\nbankers<\/li><li>Objects of the proposed\ndelisting<\/li><li>Details of escrow account &amp;\namount deposited therein<\/li><li>Shareholding pattern after\ndelisting<\/li><li>Statement of a declaration by\nBOD stating that the company has complied with all the provisions of securities\nlaw.<\/li><\/ul>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"j_Specified_date\"><\/span>j)&nbsp;&nbsp;&nbsp;&nbsp;\nSpecified date <span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>A\ndate within 30 days of public announcement shall be specified on which the\nnames of all the shareholders to whom the offer letter shall be issued.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"k_Dispatch_Letter_of_Offer\"><\/span>k)&nbsp;&nbsp;\nDispatch Letter\nof Offer <span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>Not\nlater than 2 working days from the date of the public announcement the company\nhas to send LOO to its public shareholders. <\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"l_Duration_of_the_Bidding_period\"><\/span>l)&nbsp;&nbsp;&nbsp;&nbsp; Duration of the Bidding period <span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>The offer shall be opened within 7 working days of public announcement &amp; shall be remained open for at least 5 working days during which the public shareholders can bid.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"m_Public_announcement\"><\/span>m)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;\nPublic\nannouncement <span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>After\nthe completion of an offer, the final price is the price that is quoted by the\nmajority of shareholders. If that price is agreed upon by the promoters, they\nmake a public announcement announcing the acceptance of the final price. <\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"n_Successful_offer\"><\/span>n)&nbsp; Successful offer <span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>An\noffer is deemed to be successful if the shareholding of the promoter combined\nwith the shares accepted through bid reaches the higher of the following:<\/p>\n\n\n\n<ul><li>90% of the shares issued of that\nclass<\/li><li>Aggregate percentage of\npre-offer promoter shareholding plus 50% offer size.<\/li><\/ul>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"o_Final_price\"><\/span>o)&nbsp;&nbsp;\nFinal price<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>If\nthe final price is accepted by the promoter, the additional fund is\ntransferred. Such additional fund is the difference between the price of per\nshare as per the final price &amp; floor price multiplied by a number of\nshares.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"p_The_final_application_to_the_stock_exchange\"><\/span>p)&nbsp;&nbsp;\nThe final application\nto the stock exchange<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>After completion of payment, the final application is sent to the stock exchange within one year from the date of passing SR requesting delisting of shares.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"2_Compulsory_Delisting\"><\/span>2)&nbsp;&nbsp;&nbsp;&nbsp; Compulsory Delisting<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>A company is compulsorily delisted by the stock exchange as a penal measure in case a listed company fails to comply with regulations &amp; provisions of listing agreement. <a href=\"https:\/\/www.sebi.gov.in\/sebi_data\/attachdocs\/1399433501593.pdf\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\">Rule 21A of Securities Contract Regulations Act<\/a> lays down the following reason for compulsory delisting:<\/p>\n\n\n\n<ul><li>If the company has incurred losses for consecutive three years &amp; has a negative net worth<\/li><li>Trading is suspended for more than 6 months<\/li><li>Shares are traded not very frequently in the last 3 years<\/li><li>Director or any officer in charge has been convicted for 3 years or more for non-complying with regulations of <a href=\"https:\/\/swaritadvisors.com\/learning\/category\/sebi-advisory\/\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\"SEBI (opens in a new tab)\">SEBI<\/a>.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Why_does_the_company_opt_for_Voluntary_Delisting\"><\/span>Why does the company opt for Voluntary Delisting?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Following\nare the various reasons explaining company opting for voluntary delisting:<\/p>\n\n\n\n<ul><li><strong>Control:<\/strong>\nThe promoter wants complete control of the business.<\/li><li><strong>New\ninvestors:<\/strong> Their strategic buyout for new investors to be\nin control &amp; charge of the business.<\/li><li><strong>Market\nvalue:<\/strong> The market value does not reflect the true\n&amp; fair picture of an entity anymore.<\/li><li><strong>Corporate\nrestricting:<\/strong> Delisting is one of the methods for\nCorporate restructuring<\/li><li><strong>Stockbroker:<\/strong>\nThey act as middlemen who invite the public to subscribe for the shares of the\ncompany.<\/li><li><strong>Fundraising:<\/strong>\nThere is an unsatisfied fundraised from the capital market. <\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Promoters who are engaged in the delisting of equity shares shall not indulge in any scheme or activity to defraud its shareholders in connection to the exit scheme. Shareholders shall be given proper exit opportunities following rules &amp; regulations of Delisting regulation. <\/p>\n\n\n\n<p>Shares\nshall be priced properly as if they are too under-priced shareholders won&#8217;t\nsurrender their shares and requirement of promoter&#8217;s holding of 90% of post\nissue will not have complied. <\/p>\n\n\n\n<div class=\"read\"><p><b>Also, Read:<\/b> <mark><a href=\"https:\/\/swaritadvisors.com\/learning\/procedure-for-registration-of-market-intermediaries-with-sebi\/\" target=\"_blank\" rel=\"noopener noreferrer\">Procedure for Registration of Market Intermediaries with SEBI<\/a><\/mark>.<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"<p>Delisting of Equity Shares means the permanent removal of shares of a listed company from any of the stock exchange where it is listed. The public company grows and develops by utilizing the capital of public shareholding. The highest risk is with bottom players of pyramids who are Equity shareholders. The primary reason to take [&hellip;]<\/p>\n","protected":false},"author":7,"featured_media":6122,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[546],"tags":[547,551],"_links":{"self":[{"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/posts\/6120"}],"collection":[{"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/users\/7"}],"replies":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/comments?post=6120"}],"version-history":[{"count":6,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/posts\/6120\/revisions"}],"predecessor-version":[{"id":10112,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/posts\/6120\/revisions\/10112"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/media\/6122"}],"wp:attachment":[{"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/media?parent=6120"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/categories?post=6120"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/tags?post=6120"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}