Regulation 35 - Delisting of equity shares of small companies - Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2021.

CHAPTER VI Part - A SPECIAL PROVISIONS FOR SMALL COMPANIES Delisting of equity shares of small companies 35 . (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 of these regulations, 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) 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 held for consideration of the proposal referred to in sub-regulation (4) of regulation 10 of these regulations is less than ten per cent of the total number of shares of the company: Provided that where the share capital of a particular class of shares of the company is not constant throughout such period, the weighted average of the shares of such class shall represent the total number of shares of such class of the company; (c) the company has not been suspended by any of the recognised stock exchanges having nationwide trading terminals for any non-compliance in the preceding one year. (2) Delisting of equity shares may be made under sub-regulation (1) only if, in addition to fulfilment of the requirements of regulations 10 and 11 of these regulations, the following conditions are fulfilled:- (a) acquirer(s) appoints a Manager to the offer and decides an exit price after consultation; (b) the exit price offered to the public shareholders shall not be less than the floor price determined in terms of clause (e) of sub-regulation (2) of regulation 8 of the Takeover Regulations; (c) the acquirer writes individually to all the public shareholders of the company informing them of its intention to get the equity shares delisted, the exit price together with the justification therefor and seeking their consent for the proposal for delisting; (d) 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 consent either to sell their equity shares at the price offered by the acquirer or to continue to hold the equity shares even if they are delisted; (e) the acquirer 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 acquirer makes payment of consideration in cash within fifteen working days from the date of expiry of seventy five working days mentioned in clause (e). (3) The communication made to the public shareholders under clause (c) of sub-regulation (2) shall contain justification for the offer price with particular reference to the applicable parameters mentioned in sub-regulation (2) of regulation 20 of these regulations and specifically mention that consent for the proposal would include consent for dispensing with the exit price discovery through reverse book building method. (4) The acquirer shall be liable to pay interest at the rate of ten percent per annum to all the shareholders, whose bids have been accepted in the delisting offer, if the price payable in terms of sub-regulation (2) is not paid to all the shareholders within the time specified thereunder: Provided that in case the delay was not attributable to any act or omission of the acquirer or was caused due to the circumstances beyond the control of the acquirer, the Board may grant waiver from the payment of such interest. (5) The relevant recognised stock exchange may delist such equity shares upon satisfying itself of compliance with this regulation.