 Listing

o Admission of securities to trading on stock exchange

o Benefits
a) Easy access to funds
b) Easy liquidity
c) Double protection of SEBI and RSE
d) Trading from anywhere in the country

o Section 40 - Companies Act, 2013 - Securities to be dealt with in stock

exchanges - (1) Every company making public offer shall, before making such
offer, make an application to one or more recognised stock exchange or
exchanges and obtain permission for the securities to be dealt with in such
stock exchange or exchanges.

o Rule 19 – SCRR, 1957 - company desirous of getting its securities listed on

RSE shall apply to the SE and forward along with the application certain
documents and particulars

o Section 21 – SCRA 1956 - issuer company is under an obligation to fulfil the

requirements of listing agreement

o Appeal – section 22, 22F – SCRA, 1956

 Delisting
o Permanent removal of securities from RSE
o Kinds
 Compulsory
 Voluntary
 From few RSE and continue on RSE with NTT
 From all RSE including RSE with NTT

 Compulsory Delisting

o Penalizing measure

o Section 21A – SCRA 1956 - RSE may compulsorily delist securities

o Rule 21 – SCRR 1957 - Grounds for compulsory delisting

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 (22 of 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, 1956 (1 of 1956); 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 :

o Process - Regulation 32, 33 - SEBI (Delisting of Equity Shares) Regulation,

2021
a) RSE may delist securities on prescribed grounds
b) Decision by panel
c) RSE shall give notice of the proposed delisting in 3 newspaper and
also display notice on its website giving time of not less than 15 days
for representation by any person aggrieved by the proposed delisting
before passing order
d) RSE shall consider representation made by co and response to the
notice
 e) RSE shall pass order – publish notice of fact of delisting in 3
newspaper- inform other RSE where shares are listed about delisitng–
upload copy of the order on website
f) RSE shall appoint independent valuer to determine fair value of
delisted shares
g) Promoter shall acquire delisted shares within 3 months of date of
delisting by paying the value determined by the valuer

o Consequences - Regulation 34 - SEBI (Delisting of Equity Shares)

Regulation, 2021
1. Where a company has been compulsorily delisted under this Chapter,
the company, its whole - time directors, person(s) responsible for
ensuring compliance with the securities laws, its promoters and the
companies which are promoted by any of them shall not directly or
indirectly access the securities market or seek listing of any
equity shares or act as an intermediary in the securities market for
a period of ten years from the date of such delisting.
2. In case of a company whose fair value is positive –
a. such a company and the depositories shall not effect transfer, by
way of sale, pledge, etc., of any of the equity shares held by the
promoters / promoter group and the corporate benefits like
dividend, rights, bonus shares, split, etc. shall be frozen for all the
equity shares held by the promoters/ promoter group, till the
promoters of such company provide an exit option to the public
shareholders in compliance with subregulation (4) of regulation 33
of these regulations, as certified by the relevant recognized stock
exchange;
b. the promoters, whole-time directors and person(s) responsible for
ensuring compliance with the securities laws, of the compulsorily
delisted company shall also not be eligible to become directors of
any listed company till the exit option as mentioned in clause (a) is
provided.

 Appeal – section 21A, 22F – SCRA 1956

Voluntary Delisting
Reasons [chandratre committee]
 Company finds listing fee payable to RSE burdensome
 Co has suspended business
 Absence of trading for considerably long period
 Inability to reap benefits of listing
 To obtain full ownership of co by promoter

From few RSE and continue on RSE with NTT

No Exit option
Process - Regulation 5,6 - SEBI (Delisting of Equity Shares) Regulation, 2021

 Prior approval of BOD

 Make application to RSE for delisting
 Issue public notice of proposed delisting in 3 newspaper – mention name of RSX,
reason, fact of continuation
 Disclose delisting in 1st annual report post delisting

From all RSE including RSE with NTT

With Exit option – exit price determined by RBB

Legal requirement - 90% of the total issued shares are to be acquired

Process - Regulation 7 – 25 - (Delisting of Equity Shares) Regulation, 2021

 Initial public announcement to RSE containing info such as reason for delisting +
compliance with R – 4; copy of announcement sent to company
 Appoint merchant banker
 Approval of BOD – within 21 days of IPA
 Approval of shareholder through SR – within 45 days of approval of BOD - 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.
 Escrow account within 7 days of shareholder approval – 25% consideration
 In-principle approval of RSX – within 15 days of special Resolution
 75% consideration before DPA - Detailed public announcement – within a day of in-
principle approval
 Letter of offer – within 2 days of DPA
 Bidding – within 7 days of DPA
 Discovered price determined by merchant banker by RBB
 Accept, reject or counter offer by acquirer
 Failure of offer – minimum shares not tendered or price rejected
 Payment upon success of offer @ DP or higher price
 Final application to RSE for permanent delisting – within 5 days of final payment
 Delisting order – shares permanently delisted