The Securities and Exchange Board of India (SEBI) has issued a new notification related to important changes in the delisting rules. This will make it easier for promoters to fix the frame price. Delisting will become easier after the new rules.

First let us know about delisting... What is delisting? The process of removing the company's shares from the exchange is called delisting. That is, after delisting, the shares cannot be traded in the exchange. Delisting can happen on the wish of the company management or by ignoring the rules. There

are two types of delisting. The first is Voluntary where the company takes the decision itself and informs the regulator about it and gets involved in the process of delisting the stock. The second is Complusory where the company is ordered to delist the stock if the rules are not followed. The delisting process is done under the rules set under the supervision of SEBI. Delisting rules >> Company fixes floor price for delisting >> Floor price means the minimum amount at which shares will be bought back >> Reverse book building process starts after floor price >> Reverse book building means the price at which investor wants to sell shares to the company >> Average price of reverse book building becomes delisting price >> Why delisting if floating share is less than 10% >> Management feels that valuation of shares is not correct >> Regulatory ban due to ignorance of rules >> What now if listing rules are violated ?  According to the new circular, if delisting is done under fixed price then this price should be at least 15% more than floor price (floor price will be under rule 19a). A new rule has also come regarding floor price - according to the new rule, floor price should not be less than the highest price of acquisition of shares during 26 weeks. As per SEBI's delisting rules, voluntary delisting requires majority approval from shareholders and also approval from the stock exchange. After obtaining both of these, the company issues a letter of offer and delisting is announced. On issuance of the delisting offer, the bidding mechanism will begin in which public shareholders will be given the opportunity to participate in the Reverse Book Building (RBB) process to determine the price for delisting. In this method, the price of the share is determined at which the shares will be delisted. The RBB process ensures that investors get a better price. As per the delisting rules, all public shareholders of a company get an opportunity to exit with the condition that the stake of the promoter and promoter group or the share buyers in the company increases to 90 percent. That is, delisting is possible only when so many shareholders offer back their stock that the number of shares with the promoters or share buyers becomes at least 90 percent. Investors are given 5 days to offer their shares at the fixed price. In which they can offer their shares.