The Securities and Exchange Board of India (‘SEBI’) amended the SEBI (Delisting of Equity Shares) Regulations, 2021 (‘Delisting Regulations’) pursuant to its Notification dated September 25, 2024 (‘Amendment’).

The key changes introduced by the Amendment include the following:

i.    Introduction of Fixed Price Process as an Alternative to the Reverse Book Building (‘RBB’) Process: If an acquirer intends to undertake a fixed price delisting process, then the acquirer must provide a fixed delisting price to the shareholders of the listed entity which price should be at least 15% more than the floor price of the equity shares calculated in accordance with the Delisting Regulations. The fixed price process will be available only if the equity shares are frequently traded;

ii.   Introduction of an Additional Parameter for Determination of Floor Price i.e., ‘Adjusted Book Value’: The Amendment introduces the concept of Adjusted Book Value within the scope of ‘floor price’ to be determined for purposes of the Delisting Regulations;

iii.  Reduction in Threshold for Counter-Offer Proposal in case of Delisting through RBB Process: The Amendment states that in case of delisting through RBB process, a counter offer can be made by the acquirer to the public shareholders, provided that: (a) the post-offer shareholding of the acquirer, along with the shares tendered by public shareholders, is not less than 75%; and (b) not less than 50% of the public shareholding has been tendered; and

iv.   Delisting of a Listed Investment Holding Company (‘IHCs’) Pursuant to a Scheme of Arrangement: The Amendment has introduced a separate delisting mechanism for listed IHCs given the peculiar nature of the investments and intrinsic value.