Sebi eases delisting procedure for small companies

Sebi today relaxed the delisting norms for small companies, a move that would help in weeding out a large number of illiquid stocks.
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 estimated to be more than 1,000 small companies where trading has been negligible for several years.
Following a suggestion received from investor association, Sebi board, which met here today, decided to simplify the delisting norms for small companies.

"The board has approved the proposal that the condition of no trading for preceding one year may be relaxed and the small companies, whose trading of equity shares during the twelve calendar months is less than 10 per cent of the total number of shares of such company, would also be eligible for simplified procedure of delisting," Sebi said in a release.

However, the exit price for such delisting should not lower than the floor price determined through reverse book building process.
"To protect the interest of investors, the exit price shall not be less than the floor price determined for the purpose of Reverse Book Building for not frequently traded securities in terms of Delisting Regulations read with Sebi Takeover Regulations," the release said.

Separately, Sebi board has approved the proposal to exempt forfeiture of partly paid-up shares from Takeover Regulations.
Now, there would be "general exemption from open offer obligations arising due to passive increase in voting rights as a result of expiry of call notice period and forfeiture of shares".
In this regard, Sebi (SAST) Regulations, 2011 would be amended.