It was widely expected that market regulator Securities and Exchange Board of India (SEBI), in its board meeting would approve the voluntary delisting regulations. SEBI had released a consultation paper on the same on August 14, 2023. The provisions proposed in the consultation paper also aimed at giving the right intrinsic value to the listed Investment Holding Companies (IHC) if they want to opt for delisting themselves from the stock exchanges.

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However, contrary to everyone’s expectation, SEBI did not approve the proposed delisting regulations. When asked about the reason, SEBI Chairperson Madhabi Puri Buch said that the board did discuss the delisting regulations, but the supporting data was insufficient. Buch also said that SEBI will go back and assess more data before it takes a final call on approving the delisting regulations.

Interestingly, Buch said that if the data requires SEBI to release a new consultation on voluntary delisting regulations, the market regulator would also be willing to do that.

The current consultation paper on voluntary delisting regulations proposed an alternate mechanism to the Reverse Book Building (RBB) process in the form of a fixed price for delisting. The consultation paper also proposed changes to the counter offer framework for delisting.

Currently, a counter delisting offer can only be made if bids received in the first offer are 90%. The consultation proposed to reduce the threshold of 90% for a counter offer. SEBI’s consultation paper also proposed important changes to the way the reference date is decided today for fixing the floor price for delisting.

The market was keenly awaiting approval on voluntary delisting regulations as it would also bring a new set of regulations for delisting of Investment Holding Companies or IHCs. Holding companies normally trade at a significant discount to their listed subsidiaries. SEBI’s consultation paper also aimed at giving shareholders of these IHCs the right intrinsic value in case of voluntary delisting.

SEBI in its board meeting relaxed the regulations for listing on Social Stock Exchange (SSE). SEBI reduced the issue size for issuance of Zero-Coupon-Zero-Principal instruments (ZCZP) by non-profit organisations on SSE to ₹50 lakh from ₹1 crore. Market regulator also reduced the minimum application size in case of public issuance of ZCZP by non-profit organisation on SSE to ₹10,000 from ₹2 lakh currently. The board of SEBI, in order to make more entities eligible to list on SSE, allowed entities registered under Section 10(23C) and 10(46) of the Income Tax Act, 1961.

SEBI also made amendments to facilitate Small and Medium REITs (SM REITs) with an asset size of at least ₹50 crore versus current minimum asset size of at least ₹500 crore for current REITs.

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(Edited by : Sangam Singh)

First Published:Nov 26, 2023 9:19 AM IST