SEBI board denies nod to new delisting rules, seeks more data

livemint.com:

CNBC-TV18. Notably, the regulator has indicated its willingness to review the delisting regulations, and had issued a consultation paper on the issue in August. While addressing Ficci’s Capital Markets Conference, or CAPAM 2023 in Mumbai last week, Buch had noted that the subject would feature in the discussions before the SEBI board in the next meeting.

“There was a popular belief that we would never review the delisting regulations and that we would stay with the reverse book-building process. A consultation paper has already been floated, and Sebi has received a lot of feedback. At the next board meeting, we are taking that proposal to our board," she said on November 17.

Under existing regulations, the exit price in case of delisting is determined when the cumulative shareholding of the promoter, along with the shares tendered by public shareholders, reaches 90 percent of the total issued shares under a reverse book-building mechanism. During reverse book-building, shareholders are invited to submit offers at prices above or equal to the floor price. After the offer closing period, the buyback price is determined based on the offers collected.

This process helps ensure fair price discovery for the buyback. SEBI’s primary goal is to curb possible share manipulation in a company that has chosen to delist from stock exchanges. Notably, a SEBI sub-group had considered providing some alternatives to the reverse book-building process, including an option to delist shares at a fixed price.