SEBI Board introduces fixed price process for de-listing

SEBI Board introduces fixed price process for de-listing

SEBI Chairperson Madhabi Puri Buch, on June 27, announced that the board has approved major changes to facilitate voluntary de-listing. She was speaking during a press meet, post the SEBI board meeting.

According to Buch, the board has introduced the fixed price process as an alternative to the reverse book-building process. Companies opting for this must set the minimum price at the floor price under the de-listing regulations, plus an additional 50 percent premium. This provides companies with greater flexibility in their de-listing strategy.

Through a scheme of arrangement, Buch noted that these companies can do selective capital reduction. "They will be able to pass on the benefit of the encashment of their holdings to the extent that they are holding liquid shares to their investors," she said. At least 75 percent of their value should be in listed companies.

Additionally, if the investing company is regulated by another regulator, they will need to comply with that regulator's framework as well. The third flexibility announced is that the counter offer mechanism made much more flexible. Earlier, the threshold for making counter offer was 90 percent subscription. Now , Buch noted that it will be 75 percent provided that at least 50 percent of public shareholding has been tendered.

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