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Delisting of Firms from Stock Markets in India



  Jan 10, 2024

Delisting of Firms from Stock Markets in India



1. What is Delisting in the Stock Market?

Delisting is the process of removal or withdrawal of a company’s stock from a stock exchange, ending its public trading.

2. Which Companies Typically Choose to Delist?

Companies opting for delisting can be both profit-making and loss-making, and may include those undergoing restructuring, mergers, shifting to private ownership, or facing financial challenges.

3. Common Reasons for Delisting:

Reasons vary from financial downturns, strategic business shifts, mergers and acquisitions, to failure in meeting regulatory compliance.

4. Delisting Procedure in India:

It involves a board resolution, shareholder approval, and an open offer for share buyback, all under the regulations set by SEBI.

5. Restrictions on Delisting in India:

SEBI imposes strict guidelines to ensure fair valuation for shareholders and compliance with legal and procedural norms.

6. Role of SEBI in Delisting:

The Securities and Exchange Board of India (SEBI) regulates the delisting process to protect investor interests and ensure transparency and fairness.

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