Sebi proposes delistings via fixed price mechanism

Mumbai: The Securities and Exchange Board of India (Sebi) has proposed major changes to delisting rules including introduction of a fixed price for taking a company private. It also suggested tweaking of the counter-offer mechanism and determination of floor price for a stock being delisted.

The regulator suggested providing an acquirer with an option of providing an exit opportunity to all public shareholders at a fixed price only for those companies that have their shares frequently traded.

Sebi said there are adequate safeguards in place for public shareholders, such as a proposal for delisting requiring approval of the shareholders through a special resolution. The proposal can be acted upon only if the votes cast by public shareholders in favour of the plan are at least two times the votes cast against it.


Besides, the public shareholders have the right to not offer their shares during the tendering period, the regulator said.

Sebi said the fixed price offered by the acquirer should not be lower than the floor price. A floor price is the minimum price required to be offered by the acquirer.