Delisting of Equity Shares

The SEBI (Delisting of Equity Shares) Regulations, 2021 shall not be applicable to:

i)securities listed and traded on the innovators growth platform of a recognized stock exchange, without making a public issue;

ii)any delisting of equity shares of a listed entity made pursuant to a resolution plan approved under section 31 of the Insolvency Code, if such plan

(a)provides for delisting of such share, or

(b)provides an exit opportunity to the existing public shareholders at a specified price.

However, the existing public shareholders shall be provided an 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.

Further, the details of delisting of such shares along with the justification for exit price in respect of delisting proposed shall be disclosed to the recognized stock exchanges within one day of resolution plan being approved under section 31 of the Insolvency Code.

In the given case, Progressive Limited is a listed company with Innovators Growth Platform and is planning to go for its public issue. Therefore, securities of Progressive Limited are listed and traded on the innovators growth platform of a recognized stock exchange, without making a public issue and hence, the SEBI (Delisting of Equity Shares) Regulations, 2021 shall not be applicable to the company.

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, December 2025, Q. 5(b) (Syllabus 2022).

According to Regulation 4(1) of the SEBI (Delisting of Equity Shares) Regulations, 2021, neither any company shall apply for nor any recognised stock exchange shall permit delisting of equity shares of a company -

•pursuant to buy-back of equity shares by the company, including a buyback pursuant to consolidation or division of all or part of the equity share capital of the company, unless a period of 6 months has elapsed from the date of completion of such buy-back,

•pursuant to preferential allotment made by a company, unless a period of 6 months has elapsed from the date of completion of such allotment,

•unless a period of three years has elapsed since the listing of that class of equity shares on any recognised stock exchange,

•if any instrument issued by the company, which is convertible into the same class of equity shares that is sought to be delisted, is outstanding.

In view of the above:

(a)The company cannot go in for delisting as only 3 months have elapsed from the date of completion of buy-back.

(b)The company cannot go in for delisting as only 5 months have elapsed from the date of completion of preferential allotment.

(c)The company can delist its equity shares as the company has been listed for 5 years.

(d)The company cannot go in for delisting as the Fully Convertible Debentures (FCDs) of the company are still outstanding.

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, December 2024, Q. 2A(i) (Syllabus 2017).

Conditions and procedure for delisting where exit opportunity is not required

Regulation 5 of the SEBI (Delisting of Equity Shares) Regulations, 2021 provides that a company may delist its equity shares from one or more of the recognised stock exchanges on which it is listed without providing an exit opportunity to the public shareholders, if after the proposed delisting, the equity shares remain listed on any recognised stock exchange that has nationwide trading terminals. Any company desirous of delisting its equity shares where no exit opportunity is required shall-

•obtain prior approval of its Board of Directors;

•make an application to the relevant recognised stock exchange for delisting its equity shares;

•issue a public notice of the proposed delisting in at least one English national newspaper, one Hindi national newspaper with wide circulation in their all India editions and one vernacular newspaper of the region where the relevant stock exchange is located;

•disclose the fact of delisting in its first annual report post delisting

An application for delisting shall be disposed of by the recognised stock exchange within a period not exceeding thirty working days from the date of receipt of such application that is complete in all respects.

The following details shall be provided in the above-mentioned public notice:

(a)The names of the recognized stock exchanges from where the equity shares of the company are intended to be delisted.

(b)The reasons for such delisting.

(c)The fact of continuation of listing of equity shares on recognized stock exchange having nationwide trading terminals.

Conditions and procedure for delisting where exit opportunity is required

Regulation 7 the SEBI (Delisting of Equity Shares) Regulations, 2021 provides that the equity shares of a company may be delisted from all the recognised stock exchanges having nationwide trading terminals on which they are listed, after an exit opportunity has been provided by the acquirer to all the public shareholders holding the equity shares sought to be delisted, in accordance with Chapter IV of these regulations.

•Initial public announcement : On the date when the acquirer decides to voluntarily delist the equity shares of the company, it shall make an initial public announcement to all the stock exchanges on which the shares of the company are listed and the stock exchanges shall forthwith disseminate the same to the public. A copy of the initial public announcement shall also be sent to the company at its registered office not later than one working day from the date of the initial public announcement.

•Appointment of the Manager to the offer : Prior to making an initial public announcement, the acquirer shall appoint a merchant banker registered with SEBI as the Manager to the offer.

•Approval by the Board of Directors : The company shall obtain the approval of its Board of Directors in respect of the proposal of the acquirer to delist the equity shares of the company, not later than twenty-one days from the date of the initial public announcement. The Board of Directors of the company, before considering the proposal of delisting, shall appoint a Peer Review Company Secretary and provide the required information to such Company Secretary for carrying out due-diligence.

•Approval by shareholders : The company shall obtain the approval of the shareholders through a special resolution, not later than forty-five days from the date of obtaining the approval of Board of Directors. The special resolution shall be acted upon only if the votes cast by the public shareholders in favour of the proposal are at least two times the number of votes cast by the public shareholders against it.

•In-principle approval of the stock exchange : The company shall make an application to the relevant recognised stock exchange for in-principle approval of the proposed delisting of its equity shares in the Form specified by the recognised stock exchange from time to time, not later than fifteen working days from the date of passing of the special resolution or receipt of any other statutory or regulatory approval, whichever is later.

•Escrow Account : The acquirer shall open an interest bearing escrow account with a Scheduled Commercial Bank, not later than seven working days from the date of obtaining the shareholders’ approval.

•Detailed Public Announcement : The acquirer shall, within one working day from the date of receipt of in-principle approval for delisting of equity shares from the recognised stock exchange, make a detailed public announcement.

•Dispatch of Letter of Offer : The acquirer shall dispatch the letter of offer to the public shareholders not later than two working days from the date of the detailed public announcement made.

•Bidding Mechanism : The bidding period shall start not later than seven working days from the date of the detailed public announcement and shall remain open for five working days.

•Discovered price : The discovered price shall be determined through the reverse book building process.

•Counter Offer : In case the discovered price is not acceptable to the acquirer, a counter offer may be made by the acquirer to the public shareholders within two working days of the closure of bidding period.

•Release of shares in case failure of offer : In case of failure of the delisting offer, the equity shares tendered / offered, shall be released.

•Payment upon success of the offer : All the public shareholders, whose bids are accepted, shall be paid the discovered price or a higher price, if any, offered by the acquirer.

•Final application to the stock exchange after successful delisting : The acquirer shall make the final application for delisting to the relevant recognised stock exchange within five working days from the date of making the payment to the public shareholders.

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, December 2023, Q. 4(c) (Syllabus 2022).

As per regulation 10 of the SEBI (Delisting of Equity Shares) Regulations, 2021, the Board of Directors of the company, before considering the proposal of delisting, shall appoint a Peer Review Company Secretary and provide the following information to such Company Secretary for carrying out due-diligence:

(a)the details of buying, selling and dealing in the equity shares of the company by the acquirer or its related entities during the period of two years prior to the date of board meeting held to consider the proposal for delisting, including the details of the top twenty five shareholders, for the said period,

(b)the details of off-market transactions of all the shareholders mentioned in clause (a) for a period of two years,

(c)any additional information, including the information mentioned above for a longer period of time, sought by the Company Secretary if the Company Secretary is of the opinion that the information provided under clauses (a) and (b) is not sufficient for providing the certification.

After obtaining the information from the Board of Directors of the company, the Company Secretary shall carry out the due-diligence and submit a report to the Board of Directors of the company certifying that the buying, selling and dealing in the equity shares of the company carried out by the acquirer or its related entities and the top twenty five shareholders is in compliance with the applicable provisions of securities laws including these regulations. While communicating the decision of the Board of Directors on the proposal for delisting of equity shares, the company shall also submit to the recognized stock exchanges on which the equity shares of the company are listed, the due -diligence report of the Company Secretary.

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, June 2025, Q. 6A(iii) (Syllabus 2022).

Regulation 10(2) of the SEBI (Delisting of Equity Shares) Regulations, 2021 states that, the Board of Directors of the company, before considering the proposal of delisting, shall appoint a Peer Review Company Secretary and provide the following information to such Company Secretary for carrying out due diligence: -

a)the details of buying, selling and dealing in the equity shares of the company by the acquirer or its related entities during the period of two years prior to the date of board meeting held to consider the proposal for delisting, including the details of the top twenty-five shareholders, for the said period.

b)the details of off-market transactions of all the shareholders mentioned in clause (a) for a period of two years;

c)any additional information, including the information mentioned in clauses (a) and (b) for a longer period of time, sought by the Company Secretary if the Company Secretary is of the opinion that the information provided under clauses (a) and (b) is not sufficient for providing the certification.

Further in terms of Regulation 10(3) of the SEBI (Delisting of Equity Shares) Regulations, 2021, after obtaining the information from the Board of Directors of the company, the Company Secretary shall carry out the due-diligence and submit a report to the Board of Directors of the company certifying that the buying, selling and dealing in the equity shares of the company carried out by the acquirer or its related entities and the top twenty five shareholders is in compliance with the applicable provisions of securities laws including these regulations.

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, December 2024, Q. 2(a) (Syllabus 2017).

Regulation 10 of the SEBI (Delisting of Equity Shares) Regulations, 2021 provides that the Board of Directors of the company, before considering the proposal of delisting, shall appoint a Peer Review Company Secretary and provide the following information to such Company Secretary for carrying out due-diligence:

(a)the details of buying, selling and dealing in the equity shares of the company by the acquirer or its related entities during the period of two years prior to the date of board meeting held to consider the proposal for delisting, including the details of the top 25 shareholders, for the said period;

(b)the details of off-market transactions of all the shareholders mentioned in clause

(a)for a period of two years;

(c)any additional information if the Company Secretary is of the opinion that the information provided under clauses (a) and (b) is not sufficient for providing the certification.

After obtaining the information from the Board of Directors of the company, the Company Secretary shall carry out the due-diligence and submit a report to the Board of Directors of the company certifying that the buying, selling and dealing in the equity shares of the company carried out by the acquirer or its related entities and the top 25 shareholders is in compliance with the applicable provisions of securities laws.

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, December 2022, Q. 2A(iii) (Syllabus 2017).

In the delisting offer, as per the provisions of the SEBI (Delisting of Equity Shares) Regulations, 2021, the acquirer shall open an interest bearing escrow account with a Scheduled Commercial Bank, not later than seven working days from the date of obtaining the shareholders’ approval, and deposit therein an amount equivalent to twenty five percent of the total consideration, calculated on the basis of the number of equity shares outstanding with the public shareholders multiplied with the floor price or the indicative price, if any given by the acquirer, whichever is higher.

The acquirer shall enter into a tripartite agreement with the Manager to the offer and the Bank for the purpose of opening the escrow account and shall authorize the Manager to the offer to operate such account.

In the given question, Indicative price is higher than floor price. Hence, Indicative price shall be considered while calculating total consideration. Therefore, amount to be deposited to the Bank at the time of opening of escrow account is 25% of the total consideration.

Based on the SEBI (Delisting of Equity Shares) Regulations, 2021 the acquirer is required to open an escrow account not later than seven working days from the date of shareholders’ approval. The shareholders’ approval is obtained on 18th March, 2023 and hence, the escrow account must be opened not later than 26th March 2023 (considering Sunday as one holiday and ignoring other holidays as they are not provided in the question).

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, December 2023, Q. 1(b) (Syllabus 2017).

“Discovered price” means the price discovered through reverse book building process in terms of Schedule II of the SEBI (Delisting of Equity Shares) Regulation 2021. Under Regulation 20 of the SEBI (Delisting of Equity Shares) Regulation 2021, after fixation of the floor price in terms of Regulation 19A, the discovered price shall be determined through the reverse book building process in the manner specified in Schedule II of these regulations, and shall be disclosed in the detailed public announcement and the letter of offer by the manager of the offer.

The acquirer shall have the option to provide an indicative price in respect of the delisting offer, which shall be higher than the floor price calculated in terms of Regulation 19A. The acquirer shall also have the option to revise the indicative price upwards before the start of the bidding period and the same shall be duly disclosed to the shareholders.

The acquirer may, if it deems fit, pay a price higher than the discovered price.

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, June 2026, Q. 6(b) (Syllabus 2022).

Fixed Delisting Price

Regulation 20A of the SEBI (Delisting of Equity Shares) Regulations, 2021, deals with the Fixed Delisting Price, under this:

(1)In case the acquirer has proposed delisting through fixed price process; the acquirer shall provide a fixed delisting price which shall be at least 15% more than the floor price calculated in terms of regulation 19A.

(2)The acquirer shall be eligible to undertake delisting through fixed price process only if the shares of the company are frequently traded.

(3)The acquirer shall be bound to accept the equity shares tendered or offered in the delisting offer, if the post-offer shareholding of the acquirer along with the shares tendered by the public shareholders reaches 90% at the fixed delisting price, offered by the acquirer.

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, June 2025, Q. 6(e) (Syllabus 2022).

Under Regulation 29 of the SEBI (Delisting of Equity Shares) Regulations, 2021, before making the detailed public announcement, the obligations of Manager to the Offer are as follows:

The Manager to the offer for delisting of equity shares shall ensure that:

i)the acquirer is able to implement the delisting offer,

ii)firm arrangements for funds through verifiable means have been made by the acquirer to meet the payment obligations under the delisting offer,

iii)the contents of the initial public announcement, the detailed public announcement, the letter of offer and the post-bidding advertisement(s) are complete, true, fair and adequate in all material aspects, based on reliable sources and are in compliance with the requirements under these regulations and other applicable securities laws,

iv)market intermediaries engaged for the purpose of the delisting of equity shares are registered with the SEBI,

v)the Manager to the offer shall exercise due diligence, care and professional judgment to ensure compliance with these regulations,

vi)the Manager to the offer shall not, either directly or indirectly through its associates, deal in its own account in the shares of the company after its appointment as Manager to the offer till the conclusion of the delisting offer,

vii)the Manager to the offer to ensure that the acquirer complies with the provisions of these regulations.

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, June 2025, Q. 5(b) (Syllabus 2022).

Public notice after Delisting Order under Regulation 32(5), by the Recognized Stock Exchange

Where the recognized stock exchange passes the compulsory delisting order, it shall:

a)forthwith publish a notice in one English national newspaper with wide circulation, one Hindi national newspaper with wide circulation in their all-India editions and one vernacular newspaper of the region where the relevant recognized stock exchange is located.

The following disclosures are to be made in the notice:

-The fact of such delisting,

-The name and address of the company,

-The fair value of the delisted equity shares, and

-The name and addresses of the promoters of the company who would be liable under sub-regulation (4) of regulation 33 of SEBI (Delisting of Equity Shares) Regulations, 2021.

b)inform all the other stock exchanges where the equity shares of the company are listed, about such delisting, and

c)upload a copy of the said order on its website.

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, December 2025, Q. 6(c) (Syllabus 2022).

Public notice before delisting order

As per the provisions of Regulation 32(3) of the SEBI (Delisting of Equity Shares) Regulations, 2021, before passing an order, the recognized stock exchange shall give a notice in at least one English national newspaper with wide circulation, one Hindi national newspaper with wide circulation in their all India editions and one vernacular newspaper of the region where the relevant recognized stock exchange is located, of the proposed delisting, giving a time period of not less than fifteen working days from the date of such notice, within which representations, if any, may be made to the recognized stock exchange by any person aggrieved by the proposed delisting and shall also display such notice on its trading systems and website.

Rights of public shareholders

As per the provisions of Regulation 33 of the SEBI (Delisting of Equity Shares) Regulations, 2021, where the equity shares of a company are compulsorily delisted by a recognized stock exchange, the recognised stock exchange shall appoint an independent valuer who shall determine the fair value of the delisted equity shares.

The recognised stock exchange shall form a Panel of expert valuers and from the said Panel, the valuer shall be appointed. The value of the delisted equity shares shall be determined by the valuer as prescribed.

The promoter of the company shall acquire the delisted equity shares from the public shareholders by paying them the value determined by the valuer, within three months of the date of delisting from the recognised stock exchange, subject to the option of the public shareholders to retain their shares.

The promoter shall be liable to pay interest at the rate of ten percent per annum to all the shareholders, who offer their shares under the compulsory delisting offer, if the price payable is not paid to all the shareholders within the specified time.

However, in case the delay was not attributable to any act or omission of the acquirer or was caused due to the circumstances beyond the control of the acquirer, the SEBI may grant waiver from the payment of such interest.

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, December 2024, Q. 4(c) (Syllabus 2022).

a)As per the Regulation 32(1) of the SEBI (Delisting of Equity Shares) Regulations, 2021, a Recognized Stock Exchange may by a reasoned order, delist equity shares of a company on any of the grounds prescribed in the rules specified under the Securities Contracts (Regulation) Act, 1956. Provided that no order shall be issued under this sub-regulation unless the company has been given a reasonable opportunity of being heard.

b)The decision regarding the compulsory delisting shall be taken by a panel to be constituted by the recognised stock exchange consisting of:

•Two directors of the recognized stock exchange and among the two one shall be a public representative.

•One representative of an investor association recognized by the SEBI.

•One representative of the Ministry of Corporate Affairs or Registrar of Companies.

•The Executive Director or Secretary of the recognized stock exchange.

c)Before passing an order, the recognised stock exchange shall give a notice in at least one English national newspaper with wide circulation, one Hindi national newspaper with wide circulation in their all India editions and one vernacular newspaper of the region where the relevant recognised stock exchange is located, of the proposed delisting, giving a time period of not less than fifteen working days from the date of such notice, within which representations, if any, may be made to the recognised stock exchange by any person aggrieved by the proposed delisting and shall also display such notice on its trading systems and website. The recognised stock exchange shall, while passing any order of compulsory delisting, consider the representation, if any, made by the company and also any representation received in response to the notice.

d)Where a company has been compulsorily delisted, the company, its whole-time directors, persons responsible for ensuring compliance with the securities laws, its promoters and the companies which are promoted by any of them shall not act as an intermediary in the securities market for a period of ten years from the date of such delisting.

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, December 2023, Q. 2A(ii) (Syllabus 2017).

Under Regulation 36(2) of the SEBI (Delisting of Equity Shares) Regulations, 2021, a company whose equity shares are listed and traded on the innovators growth platform pursuant to an initial public offer may be delisted from the innovators growth platform, if –

(a)such delisting is approved by the Board of Directors of the company;

(b)such delisting is approved by the shareholders of the company by a special resolution passed through postal ballot or e-voting, after disclosure of all material facts in the explanatory statement sent to the shareholders in relation to such resolution. However, the special resolution shall be acted upon only if the votes cast by the majority of public shareholders are in favour of such exit proposal;

(c)delisting price is based on a floor price determined in terms of regulation 8 of Takeover Regulations, as may be applicable, and an additional delisting premium justified by the acquirer;

(d)the post offer shareholding of the acquirer along with the persons acting in concert with it, taken together with the shares tendered reaches 75% of the total issued shares of that class and at least 50% shares of the public shareholders as on date of the board meeting are tendered and accepted; and

(e)the recognised stock exchange, on which its shares are listed, approves of such delisting.

Therefore, Star Limited would be required to comply with the above conditions for delisting under the SEBI (Delisting of Equity Shares) Regulations, 2021.

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, June 2026, Q. 6A(ii) (Syllabus 2022).

Regulation 40 of the SEBI (Delisting of Equity Shares) Regulations, 2021 states that no application for listing shall be made in respect of equity shares of a company which have been delisted under Chapter III (Voluntary Delisting) or under Chapter VI (Exit Opportunity in case delisting of equity shares of a company from all the recognised stock exchanges), for a period of 3 years from the delisting and in case of equity shares which have been delisted under Chapter V (Compulsory Delisting), for a period of 10 years from the delisting, except the following:

(i)whose equity shares have been delisted pursuant to a resolution plan under section 31 of the Insolvency Code;

(ii)whose equity shares are listed and traded on the innovators growth platform pursuant to an initial public offer and which is delisted from the said platform;

(iii)whose equity shares have been delisted in terms of regulation 35 relating to delisting of equity shares of small companies.

Therefore, under the given scenario, ASR Limited has voluntarily delisted its equity shares from the Bombay Stock Exchange and the National Stock Exchange on 1st December, 2024. In light of the above mentioned provisions, the shares of ASR Limited is not permitted to be listed for a period of 3 years from the delisting i.e. from the date of 1st December 2024 i.e. 30th November 2027.

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, June 2026, Q. 4(c) (Syllabus 2022).

As per the provisions of the SEBI (Delisting of Equity Shares) Regulations, 2021, no application for listing shall be made in respect of equity shares of a company which have been delisted under Chapter III (Voluntary Delisting) or under chapter IV (Exit Opportunity), for a period of 3 years from the delisting and which have been delisted under Chapter V (Compulsory Delisting), for a period of 10 years from the delisting, except the following:

•Whose equity shares have been delisted pursuant to a resolution plan under section 31 of the Insolvency Code;

•Whose equity shares are listed and traded on the innovators growth platform pursuant to an Initial Public Offer and which is delisted from the said platform;

•Whose equity shares have been delisted in terms of regulation 35 (Delisting of equity shares of small companies).

In case equity shares of the ABC Limited have been voluntarily delisted from the stock exchange from one or more of the recognised stock exchanges or from all the recognised stock exchanges, the application for listing shall not be made for a period of 3 years. In case of compulsory delisting, the application for listing shall not be made for a period of 10 years.

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, June 2023, Q. 2(c) (Syllabus 2017).

Rule 21 of Securities Contracts (Regulation) Rules, 1957 deals with delisting of Securities. A recognized stock exchange may, without prejudice to any other action that may be taken under the Securities Contracts (Regulation) Act, 1956 (the Act) or under any other law for the time being in force, delist any securities listed thereon on any of the following grounds in accordance with the regulations made by SEBI, namely: —

(a)The company has incurred losses during the preceding three consecutive years and it has negative net worth;

(b)Trading in the securities of the company has remained suspended for a period of more than six months;

(c)The securities of the company have remained infrequently traded during the preceding three years;

(d)The company or any of its promoters or any of its director has been convicted for failure to comply with any of the provisions of the Act or the SEBI Act, 1992 or the Depositories Act, 1996 or rules, regulations, agreements made thereunder, as the case may be and awarded a penalty of not less than rupees one crore or imprisonment of not less than three years;

(e)The addresses of the company or any of its promoter or any of its directors, are not known or false addresses have been furnished or the company has changed its registered office in contravention of the provisions of the Companies Act, 2013; or

(f)Shareholding of the company held by the public has come below the minimum level applicable to the company as per the listing agreement under the Act and the company has failed to raise public holding to the required level within the time specified by the recognized stock exchange.

However, no securities shall be delisted unless the company concerned has been given a reasonable opportunity of being heard.

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, December 2021, Q. 5(b) (Old syllabus).

Rule 21 of the Securities Contracts (Regulations) Rules, 1957 deals with the delisting of securities. A recognized stock exchange may, without prejudice to any other action that may be taken under the Act or under any other law for the time being in force, delist any securities listed thereon on any of the following grounds in accordance with the regulations made by the Securities and Exchange Board of India, namely:—

(a)the company has incurred losses during the preceding three consecutive years and it has negative networth;

(b)trading in the securities of the company has remained suspended for a period of more than six months;

(c)the securities of the company have remained infrequently traded during the preceding three years;

(d)the company or any of its promoters or any of its director has been convicted for failure to comply with any of the provisions of the Act or the Securities and Exchange Board of India Act, 1992 or the Depositories Act, 1996 or rules, regulations, agreements made thereunder, as the case may be and awarded a penalty of not less than rupees one crore or imprisonment of not less than three years;

(e)the addresses of the company or any of its promoter or any of its directors, are not known or false addresses have been furnished or the company has changed its registered office in contravention of the provisions of the Companies Act, 2013;

(f)shareholding of the company held by the public has come below the minimum level applicable to the company as per the listing agreement under the Act and the company has failed to raise public holding to the required level within the time specified by the recognized stock exchange. No securities shall be delisted unless the company concerned has been given a reasonable opportunity of being heard.

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, June 2019, Q. 1(b) (Syllabus 2017).

a)Payment of consideration [Regulation 20]

The promoter of SAARC Ltd. shall immediately upon success of the offer, open a special account with a SEBI registered banker to an issue and transfer thereto, the entire amount due and payable as consideration in respect of equity shares tendered in the offer, from the escrow account. All the shareholders whose equity shares are verified to be genuine shall be paid the final price stated in the public announcement within ten working days from the closure of the offer.

b)Right of remaining shareholders to tender equity shares [Regulation 21]

Remaining public shareholder holding such equity shares may tender their shares to the promoter up to a period of minimum one year from the date of delisting and, in such a case, the promoter shall accept the shares tendered at the same final price at which the earlier acceptance of shares was made. The payment of consideration for shares accepted shall be made out of the balance amount lying in the escrow account.

The amount in the escrow account or the bank guarantee shall not be released to the promoter unless all payments are made in respect of shares tendered.

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, June 2021, Q. 2A(ii) (Syllabus 2017).

Compulsory delisting refers to permanent removal of securities of a listed company from a stock exchange as a penalizing measure at the behest of the stock exchange for not making submissions/comply with various requirements set out in the listing agreement within the time frames prescribed. In voluntary delisting, a listed company decides on its own to permanently remove its securities from a stock exchange.

In case of voluntary delisting company cannot make public issue for next 5 years after delisting but in case of compulsory delisting company cannot make public issue for next 10 years after delisting. In case of voluntary delisting pricing norm shall be applicable but in case of compulsory delisting no such norm are there.

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, June 2019, Q. 5(d) (Old syllabus).

Following are the circumstances where delisting is not permissible:

—In case of buy back of equity shares by the company; or

—In case of preferential allotment made by the company; or

—Unless a period of three years has elapsed since the listing of that class of equity shares on any recognised stock exchange; or

—Instruments which are convertible into the same class of equity shares that are sought to be delisted are outstanding.

—No promoter or promoter group shall propose delisting of equity shares of company, if any entity belonging to the promoter or promoter group has sold equity shares of the company during a period of six month prior to the date of the Board meeting in which the delisting proposal was approved.

—Delisting of convertible securities.

—No promoter shall directly or indirectly employ the funds of the company to finance an exit opportunity or an acquisition of shares made pursuant to be provided under the SEBI Delisting Regulations.

—No acquirer or promoter or promoter group or their related entities shall:

—Employ any device, scheme or artifice to defraud any shareholder or other person; or

—Engage in any transaction or practice that operates as a fraud or deceit upon any shareholder or other person; or

—Engage in any act or practice that is fraudulent, deceptive or manipulative in connection with such delisting.

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, December 2018, Q. 5(b) (Old syllabus).