SEBI is reviewing the delisting rules. SEBI Chairman Madhabi Puri Buch told that soon new consultation papers will be issued regarding this. However, he said that it would be too early to say anything on this.
Let us tell you that the process of removing the shares of the company from the exchange is called delisting. If put in simple words, after delisting, trading cannot take place in the stock exchange. Delisting can happen on the will of the company management or ignoring the rules.
In delisting, the company’s stock is removed from the stock market. who have bought shares. The company buys them back from investors.
What are the current rules for delisting?
Experts say that the company fixes the floor price for delisting. Floor price means the minimum amount at which the shares will be bought back. After the floor price, the reverse book building process begins. Reverse book building means the price at which the investor wants to sell the shares of the company. The average price of reverse book building becomes the delisting price.
Why delisting- The management feels that the valuation of the shares is not right or due to the ignorance of the rules, regulatory ban has been imposed on the company. Apart from this, delisting is done for violating the listing rules.
What will happen now- According to CNBC, SEBI is reviewing the delisting rules. Sources say that work can be done on fixed price for delisting. If the first attempt of delisting fails, it can be extended further. The problems related to reverse book building for delisting are being reviewed. Consultation papers can be issued on this in August.
