SECURITIES AND EXCHANGE BOARD OF INDIA (DELISTING OF EQUITY SHARES) REGULATIONS, 2021
No. SEBI/LAD-NRO/GN/2021-25.—In exercise of the powers conferred by section 31 read with section 21A of the Securities Contracts (Regulation) Act, 1956 (42 of 1956) and section 30, sub-section (1) of section 11 and sub-section (2) of section 11A of the Securities and Exchange Board of India Act, 1992 (15 of 1992), the Board hereby makes the following regulations, namely: –
CHAPTER I
PRELIMINARY
1. Short title and commencement
(1) These regulations shall be called the Securities and Exchange Board of India (Delisting of Equity Shares) Regulations 2021.
(2) They shall come into force on the date of their publication in the Official Gazette.
2. Definitions
(1) In these regulations, unless the context otherwise requires, the terms defined herein shall bear the meaning assigned to them below and their cognate expressions and variations shall be construed accordingly,-
a) “Act” means the Securities and Exchange Board of India Act, 1992 (15 of 1992);
b) “acquirer” includes a person –
(i) who decides to make an offer for delisting of equity shares of the company along with the persons acting in concert in accordance with regulation 5A of the Takeover Regulations as amended from time to time ; or
(ii) who is the promoter or part of the promoter group along with the persons acting in concert.
c) “Board” means the Securities and Exchange Board of India established under section 3 of the Act;
d) “bidding period” means the period within which shareholders may tender their shares in acceptance of the offer for delisting of equity shares of the company made under these regulations;
e) “control” shall have the same meaning as assigned to it under the Takeover Regulations as amended from time to time;
f) “company” means a company within the meaning of sub-section (20) of section 2 of the Companies Act, 2013 (18 of 2013) and includes a body corporate or corporation established under any enactment for the time being in force, whose equity shares are listed on a recognised stock exchange;
g) “compulsory delisting” means delisting of equity shares of a company by a recognised stock exchange under Chapter V of these regulations;
h) “Company Secretary in practice” means a Company Secretary as defined in section 2(c) of the Company Secretaries Act, 1980 (56 of 1980) who is deemed to be in practice under sub-section (2) of section 2 of the said Act;
i) “detailed public announcement” means the announcement made by the acquirer in terms of regulation 15 read with Schedule I of these regulations;
j) “delisting” means permanent removal of equity shares of the company from the trading platform of a recognised stock exchange, either by way of voluntary or compulsory method;
k) “delisting period” means the period between the date of initial public announcement and the date of payment of consideration to the shareholders, whose shares have been accepted in the reverse book building process or the date on which shares have been returned upon failure of the delisting offer, as the case may be;
l) “discovered price” means the price discovered through reverse book building process in terms of Schedule II of these Regulations;
m) “floor price” means the minimum price offered by the acquirer, computed in accordance with regulation 8 of the Takeover Regulations as amended from time to time, while making the proposal for voluntarily delisting of the equity shares of the company;
n) “frequently traded shares” shall have the same meaning as assigned to it under the Takeover Regulations as amended from time to time;
o) “indicative price” means the price offered by the acquirer, which is higher than the floor price, while making the proposal to voluntarily delist the equity shares of the company;
p) “innovators growth platform” shall have the same meaning as assigned to it under the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 as amended from time to time;
q) “initial public announcement” means the first announcement, including subsequent modifications thereto, if any, made by the acquirer to express its intention to voluntarily delist the equity shares of the company from all the recognised stock exchanges.
r) “Insolvency Code” means the Insolvency and Bankruptcy Code, 2016 (31 of 2016);
s) “Peer Review Company Secretary” means a Company Secretary in practice, who is either practicing individually or as a sole proprietor or as a partner of a Peer Reviewed Practice Unit , holding a valid certificate of peer review issued by the Institute of Company Secretaries of India;
t) “public shareholding” shall have the same meaning as assigned to it under rule 2(e) of the Securities Contracts (Regulation) Rules, 1957 as amended from time to time and “public shareholders” shall be construed accordingly;
u) “persons acting in concert” shall have the same meaning as assigned to it under the Takeover Regulations as amended from time to time;
v) “promoter” shall have the same meaning as assigned to it under the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 as amended from time to time;
w) “promoter group” shall have the same meaning as assigned to it under the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 as amended from time to time;
x) “recognised stock exchange” means any stock exchange that has been granted recognition under section 4 of Securities Contracts (Regulation) Act, 1956 (42 of 1956) as amended from time to time;
y) “Schedule” means a Schedule appended to these regulations;
z) “securities laws” mean the Act, the Securities Contracts (Regulation) Act, 1956 (42 of 1956), the Depositories Act,1996 (22 of 1996), the relevant provisions of any other law to the extent it is administered by the Board and the relevant rules and regulations made thereunder;
aa) “Takeover Regulations” mean the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011;
bb) “voluntary delisting” means the delisting of equity shares of a company voluntarily on an application made by it under Chapter III of these regulations;
cc) “valuer” shall have the same meaning as assigned to it under section 247 of the Companies Act, 2013 (18 of 2013) as amended from time to time;
dd) “volume weighted average price” shall have the same meaning as assigned to it under the Takeover Regulations as amended from time to time;
ee) “working days” means the working days of the Board.
(2) All other words and expressions used but not defined in these regulations, but defined in the Act or the Companies
Act, 2013 (18 of 2013), the Securities Contracts (Regulation) Act, 1956 (42 of 1956), the Depositories Act, 1996 (22 of 1996) and/or the rules and regulations made thereunder, shall have the same meaning as respectively assigned to them in such Acts or rules or regulations or any statutory modification or re-enactment thereto, as the case may be.
CHAPTER II
DELISTING OF EQUITY SHARES
3. Scope and applicability
(1) These regulations shall apply to delisting of equity shares of a company including equity shares having superior voting rights from all or any of the recognised stock exchanges where such shares are listed.
(2) Nothing contained in these regulations shall apply to the delisting of equity shares of a listed company—
(a) that have been listed and traded on the innovators growth platform of a recognised stock exchange without making a public issue;
(b) made pursuant to a resolution plan approved under section 31 of the Insolvency Code, if such plan provides for:
(i) delisting of such shares; or
(ii) an exit opportunity to the existing public shareholders at a specified price:
Provided that the existing public shareholders shall be provided the exit opportunity at a price which shall not be less than the price, by whatever name called, at which a promoter or any entity belonging to the promoter group or any other shareholder, directly or indirectly, is provided an exit opportunity:
Provided further that the details of delisting of such shares along with the justification for the exit price in respect of the proposed delisting shall be disclosed to the recognized stock exchange(s) where the shares are listed within one day of approval of the resolution plan under section 31 of the Insolvency Code.
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