The delisting offer of Essar Oil has been put on hold based on the directive of Sebi, as per a notification on the stock exchanges on Thursday.
“It is a procedural thing…to align it with revised delisting guidelines announced by Sebi last week,” said one person with direct knowledge of the matter, on conditions of anonymity.
“The company had approached the exchange for in principle approval for delisting of its equity shares. However, as advised by Sebi, the matter has been put on hold till further directions in this regard are received,” the notification said.
An Essar Oil spokesperson declined to comment. He, however, confirmed that the update was issued as per Sebi directions and not by the company. A stock exchange spokesperson declined to comment citing compliance reasons.
Sebi board changed the requirement to minimum 25% on the number of public shareholders’ participation in a reverse book building (RBB) process compared with the requirement of achieving 50% of public shareholding earlier. The regulator reduced the time line on delisting to a minimum of 76 days from 137 days earlier, and allowed the use of stock exchanges for delisting of shares. While the final guidelines are awaited, corporate lawyers opine that stock exchanges will be required to grant in principle approval within five working days as against 30 days under the current regime.
In addition, the revised norms also allow the use of the takeover code to delist the shares on conditions the company disclose its intent to remain listed or not at the time announcing the mandatory open offer under the takeover code, among other changes.
Shares of Essar Oil ended down 0.5% on Thursday, after having fallen 3.92%intra-day. The stock has lost nearly 20% in the last two weeks and is below the floor price of R108. The bulk of losses was seen after Sebi’s revised guidelines. The company, on June 23, had proposed voluntary delisting of shares where they planned to acquire 13.7 crore shares (27.5% stake) from public shareholders.