1. Sebi eases delisting norms for small companies

Sebi eases delisting norms for small companies

To weed out a large number of illiquid stocks, capital markets regulator Sebi has relaxed norms for small companies with thinly traded shares to delist from the stock exchanges.

By: | New Delhi | Published: January 13, 2016 5:34 PM
At present, Sebi norms allow only those companies whose shares have not been traded for the preceding one year to get delisted. (Reuters)

At present, Sebi norms allow only those companies whose shares have not been traded for the preceding one year to get delisted. (Reuters)

To weed out a large number of illiquid stocks, capital markets regulator Sebi has relaxed norms for small companies with thinly traded shares to delist from the stock exchanges.

Now, small listed firms where trading has been less than 10 per cent of the total shares in the last 12 months can get delisted from the stock exchanges.

At present, Sebi norms allow only those companies whose shares have not been traded for the preceding one year to get delisted.

There are more than 1,000 small companies where trading has been negligible for several years.

The move comes after the board of Securities and Exchange Board of India (Sebi) approved the norms in November.

In a notification, Sebi said “the number of equity shares of the company traded on each such recognised stock exchange during the 12 calendar months immediately preceding the date of board meeting…is less than 10 per cent of the total number of shares of such company,” would be eligible for simplified procedure of delisting.

The relaxation is provided in case the “share capital of a particular class of shares of the company is not identical throughout such period, the weighted average of the shares of such class shall represent the total number of shares of such class of shares of the company.”

However, the exit price for such delisting should not lower than the floor price determined through reverse book building process.

Tags: Sebi
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