Regulation 27 - Special provisions in case of small companies - Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009

CHAPTER VII SPECIAL PROVISIONS FOR SMALL COMPANIES AND DELISTING BY OPERATION OF LAW Special provisions in case of small companies 27. 1 [(1) Equity shares of a company may be delisted from all the recognised stock exchanges where they are listed, without following the procedure in Chapter IV, if,- a) the company has a paid up capital not exceeding ten crore rupees and net worth not exceeding twenty five crore rupees as on the last date of preceding financial year; b) 2 [the number of equity shares of the company traded on each such recognised stock exchange during the twelve calendar months immediately preceding the date of board meeting referred to in sub-regulation (1B) of regulation 8 is less than ten per cent of the total number of shares of such company: Provided that where 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; and] c) the company has not been suspended by any of the recognised stock exchanges having nation-wide trading terminals for any non-compliance in the preceding one year;] (2) 3 [***] (3) A delisting of equity shares may be made under sub regulation (1) 4 [***] only if, in addition to fulfilment of the requirements of regulation 8, the following conditions are fulfilled:- (a) the promoter appoints a merchant banker and decides an exit price in consultation with him; (b) 5 [the exit price offered to the public shareholders shall not be less than the floor price determined in terms of sub-regulation (2) of regulation 15 of these regulations read with clause (e) of sub-regulation (2) of regulation 8 of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011; [(c) the promoter writes individually to all public shareholders in the company informing them of his intention to get the equity shares delisted, indicating the exit price together with then justification therefore and seeking their consent for the proposal for delisting; (d) 6 [the public shareholders, irrespective of their numbers, holding ninety percent or more of the public shareholding give their consent] in writing to the proposal for delisting, and have consented either to sell their equity shares at the price offered by the promoter or to remain holders of the equity shares even if they are delisted; (e) the promoter completes the process of inviting the positive consent and finalisation of the proposal for delisting of equity shares within seventy five working days of the first communication made under clause (c); (f) the promoter makes payment of consideration in cash within fifteen working days from the date of expiry of seventy five working days stipulated in clause (e). (4) The communication made to the public shareholders under clause (c) of sub-regulation (3) shall contain justification for the offer price with particular reference to the applicable parameters mentioned in regulation 15 and specifically mention that consent for the proposal would include consent for dispensing with the exit price discovery through book building method. (5) The concerned recognised stock exchange may delist such equity shares upon satisfying itself of compliance with this regulation. ********* 1 Substituted by the SEBI (Delisting of Equity shares) (Amendment) Regulations 2015, w.e.f. 24-03-2015. 2 SEBI (Delisting of Equity Shares) (Amendment) Regulations, 2016, w.e.f 12-1-2016. Prior to the substitution, clause b) read as follows: the equity shares of the company were not traded in any recognised stock exchange for a period of one year immediately preceding the date of board meeting referred to in sub-regulation (1B) of regulation 8; and 3. Omitted by the SEBI (Delisting of Equity shares) (Amendment) Regulations, 2015, w.e.f. 24-03-2015. 4 Omitted the words or sub-regulation (2) by the SEBI (Delisting of Equity shares) (Amendment) Regulations, 2015, w.e.f. 24-03-2015. 5 Substituted by the SEBI (Delisting of Equity Shares) (Amendment) Regulations, 2016, w.e.f 12-1-2016. Prior to such substitution, clause b) read as follows: the exit price offered to the public shareholders shall not be less than the price arrived at in consultation with the merchant banker; 6 Substituted for the words at least ninety per cent of such public shareholders give their positive consent by the SEBI (Delisting of Equity Shares) (Second Amendment) Regulations, 2018, w.e.f. 14.11.2018.