SEBI has made tough rules for companies to Delist. During the down market, Several Listed Companies are trying to delist from the various stock exchanges. The reason is very simple. During the down economy, the valuations of stocks are beaten down at so much lower level that these valuations become very much attractive and that’s why promoters delist their companies to acquire all the stocks of the Company to increase the hold over the Company.
When Promoters increase their stake on their own companies after delisting, their holdover the company increases very much which is beneficial for them.
But the SEBI has made tougher rules for Delisting the Company.
According to SEBI, Non-promoter shareholders’ votes in favour the delisting proposal should be at least two times the number of votes cast against it by them.
The new regulations now allow public shareholders to have a meaningful say in approving the special resolution required for delisting.
SEBI has also clarified on the definition of a successful open offer, ahead of the delisting, though the market regulator has fixed a higher limit for the total number of shares that needs to be acquired to delist. SEBI said an open offer would be deemed successful if the promoter shareholding post-offer is higher of 90% of total equity.
According to new rules, the promoter of the company has to buy the delisted shares from the minority shareholders, based on a price determined by an exchange appointed valuer
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