minority shareholders to get an exit route in case a company
delists its shares from the exchanges, a Securities and
Exchange Board of India (Sebi) committee has recommended
that the open offer price should be determined through
The minimum exit
price will, however, be the average of the traded price
of the previous 26 weeks, the panel has suggested.
The committee on
delisting of shares, headed by the Sebi executive director
Pratip Kar, has said that no company can use the buyback
provision to delist its shares. It has also suggested
setting up a central listing authority (CLA) to bring
uniformity to listing applications. It has also recommended
that securities can be relisted after two years of delisting.
The committee has
recommended that the offer price should have a floor price,
which will be the average of 26 weeks traded price, and
no ceiling. Market forces of demand and supply through
book-building process should help discover the correct
exit price, it said. Stock exchanges will provide the
infrastructure for investors to see the price on the screen
to bring transparency to the delisting process.
the event of securities being delisted, the acquirer should
allow a further period of six months for any of the remaining
shareholders to tender shares at the same price.
CLA will have a
maximum of 11 members selected from the legal fraternity
and those with expertise in securities market regulation.