Securities and Exchange Board of India (Delisting of Equity Shares) (Amendment) Regulations, 2024

6234 GI/2024 (1)
REGD. No. D. L.-33004/99

xxxGIDHxxx xxxGIDExxx
EXTRAORDINARY
PART III—Section 4
PUBLISHED BY AUTHORITY
Securities and Exchange Board of India
New Delhi, September 25, 2024
Securities and Exchange Board of India
[Delisting of Equity Shares] (Amendment) Regulations, 2024 No. SEBI/HO/CFD/EDP1/CIR/P/2024/206.—In exercise of the powers conferred by Section 31 read with Section 21A of the Securities Contracts (Regulation) Act, 1956 (42 of 1956) and Sections 30, 11(1) and 11A(2) of the Securities and Exchange Board of India Act, 1992 (15 of 1992), the Board hereby makes the following regulations to further amend the Securities and Exchange Board of India [Delisting of Equity Shares] Regulations, 2021, namely:-

1. These regulations may be called the Securities and Exchange Board of India [Delisting of Equity Shares] (Amendment) Regulations, 2024.

2. These regulations shall come into force on the date of their publication in the Official Gazette:
   Provided that these regulations shall apply to delisting offers in respect of which the initial public announcement is made on or after the date on which these regulations come into force:
   Provided further that an acquirer may make a delisting offer in accordance with the provisions of the Securities and Exchange Board of India [Delisting of Equity Shares] Regulations, 2021 until the date of publication of these regulations in the Official Gazette, provided that such offer was made before these regulations came into force.

No. 755] NEW DELHI, WEDNESDAY, SEPTEMBER 25, 2024/ASVINA 3, 1946 CG-MH-E-25092024-257490

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3. In the Securities and Exchange Board of India [Delisting of Equity Shares] Regulations, 2021,

I. In Regulation 2, in sub-regulation (1),

i. after clause (c), the following clause shall be inserted, namely:-
"(d) "Fixed Delisting Price" means the fixed price which the acquirer is willing to pay for the equity shares of the listed company when making an offer to delist the equity shares of the listed company by adopting the Fixed Price Process;"

ii. in place of the existing clause (d), the following clause shall be inserted, namely:-
"(e) "Floor Price" means the minimum price which the acquirer is willing to pay for the equity shares of the listed company when making an offer to voluntarily delist the equity shares of the listed company in accordance with the provisions of Regulation 19A of these Regulations;"

iii. after clause (d), the following clause shall be inserted, namely:-
"(f) "Investment Holding Company" means a company in which investments have been made in listed or unlisted companies or which holds other assets (assets) other than these investments;"

II. In Regulation 14,

i. in place of the existing sub-regulation (1), the following sub-regulation shall be inserted, namely:-
"(1) The acquirer, within seven working days from the date of receipt of shareholder approval, shall open a separate account (which earns interest) with a scheduled commercial bank and deposit an amount equal to twenty-five percent of the total consideration payable to shareholders during the delisting offer, which shall be calculated as follows:-

i. if the delisting offer is made by adopting the Tender Offer Process; then in such a case, for the purpose of calculating the total consideration payable to shareholders during the delisting offer, the number of equity shares held by 'shareholders falling under the category of public shareholders' (public shareholders) shall be multiplied by the floor price or the indicative price [if any indicative price is given by the acquirer in accordance with sub-regulation (4) of Regulation 20 of these Regulations], whichever is higher;

ii. if the delisting offer is made by adopting the Fixed Price Process; then in such a case, for the purpose of calculating the total consideration payable to shareholders during the delisting offer, the number of equity shares held by 'shareholders falling under the category of public shareholders' (public shareholders) shall be multiplied by the fixed price offered by the acquirer (acquirer) when making the delisting offer."

ii. in place of the existing sub-regulation (3), the following sub-regulation shall be inserted, namely:-
"(3) Before making the detailed public announcement under Regulation 15 of these Regulations, the acquirer shall deposit a specific amount {or seventy-five percent of the total consideration payable to shareholders during the delisting offer [if the amount of total consideration payable to shareholders during the delisting offer is calculated in accordance with sub-regulation (1)]} in the separate account."

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III. In Regulation 17,

i. in the heading, after the words and symbols "Tendering" and before the words "Management", the words and symbols "/ Tendering" shall be inserted;

ii. in sub-regulation (1), in place of the words "Right to tender", the words and symbols "Right to tender (tendering) if the delisting offer is made by adopting the Tender Offer Process or the right to tender (tendering) if the delisting offer is made by adopting the Fixed Price Process" shall be inserted;

iii. in sub-regulation (2), after the word "Acquirer", the symbol and word "(Acquirer)" shall be inserted.

iv. in sub-regulation (3),-

a) in place of the words "Tender Offer Process", the words and symbols ", as applicable, the Tender Offer Process or the Fixed Price Process" shall be inserted;

b) after the words and symbols "Right to tender (tendering)" and before the words "ends", the words and symbols "or right to tender (tendering)" shall be inserted;

v. in place of the existing sub-regulation (4), the following sub-regulation shall be inserted, namely:-
"(4) The acquirer, through the manager of the offer, shall issue a public announcement in the same newspapers in which the detailed public announcement was issued under sub-regulation (1) of Regulation 15 of these Regulations, within two working days from the date of expiry of the right to tender (tendering) or the right to tender (tendering), and state whether the Fixed Price Process or the Tender Offer Process adopted for delisting has been successful or unsuccessful, and also state, if the Tender Offer Process has been successful, that the 'Approved Price' has been approved."

IV. In Regulation 19,

i. in the heading, in place of the words "Tender Offer Process", the words and symbols "Delisting Process" shall be inserted;

ii. in sub-regulation (1),

a) in place of the words "such public shareholders", the words "such shareholders falling under the category of public shareholders" shall be inserted;

b) after the words "in the same manner" and before the words "Tender Offer Process", the words "in the Fixed Price Process or" shall be inserted;

iii. in sub-regulation (3),

a) in place of the words and symbols "to any holder of Depository Receipts", the words and symbols "to the holder of Depository Receipts" shall be inserted;

b) in place of the words "Tender Offer", the words and symbols "Delisting (Delisting)" shall be inserted;

c) in the proviso, in place of the words and symbols "any holder of Depository Receipts", the words and symbols "Depository Receipts which the holder has" shall be inserted, and in place of the words "Tender Offer", the words and symbols "Delisting (Delisting)" shall be inserted;

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V. After Regulation 19, the following regulation shall be inserted, namely:-

"Floor Price

19A (1) The floor price of the equity shares, as applicable, to be delisted by adopting the Tender Offer Process or the Fixed Price Process, shall not be less than the highest of the following:-

(i) Volume Weighted Average Price (Volume Weighted Average Price) paid or payable for equity by the acquirer and persons acting in concert with the acquirer, during the 52 weeks immediately preceding the reference date;

(ii) Maximum price paid or payable for equity by the acquirer and persons acting in concert with the acquirer, during the 26 weeks immediately preceding the reference date;

(iii) Adjusted Book Value calculated by any independent registered valuer (valuer) [calculated on the basis of consolidated financial statements]:
Provided that the provision of Adjusted Book Value shall not apply in the case of delisting of entities in the unlisted sector.

(iv) Volume Weighted Market Price of the trading on the stock exchange where the equity shares have the least remaining trading (provided that the trading of these shares is not frequent trading), for the 60 days preceding the reference date;

(v) if the trading of shares is frequent trading, then in such a case, the price calculated by any independent registered valuer for valuation for valuation of shares of companies in the same industry as the company, based on the standards [such as Book Value, Comparable Trading Multiples and any other generally accepted valuation standards (Customary Valuation Methods)] adopted for valuation.

Explanation: The Adjusted Book Value of the company shall be calculated as follows – A + B + C + D – L, where, 'A' – This shall be the book value (Book Value) of all assets [excluding jewelry, artworks, shares and securities (Securities) and immovable property] in the balance sheet, from which any amount shown as an asset shall be deducted if it does not represent the true value of any asset, such as the net amount of deferred expenditure; 'B' – This shall be the price at which jewelry and artworks can be sold in the market based on the valuation report obtained from any registered valuer; 'C' – This shall be the fair market value of the shares and securities (Securities) in which trading is frequent / frequent trading, which shall be calculated by the registered valuer in accordance with internationally accepted valuation methods. If the shares and securities are traded and frequently traded on any recognized stock exchange, then the fair market value of such shares and securities shall be the price at which they were bought and sold on that stock exchange on the date of valuation; 'D' – This shall be the value at which immovable property has been approved or assessed or can be assessed by any government authority for the purpose of payment of stamp duty. If the immovable property is located outside India, then in such a case, the market value of such property shall be calculated by an independent registered valuer;

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'L' – This shall be the book value (Book Value) of liabilities shown in the balance sheet, but the following amounts shall not be included in it, namely:-

• Paid-up capital in respect of equity shares;
• Amounts kept separately for payment of dividends on preference shares (preference shares) and equity shares, provided that such dividends have not been declared before the date of transfer;
• Amounts of reserves (Reserves) and surplus, however they may be shown, even if the amount is negative, but the amount kept separately for depreciation shall not be included in it;
• The amount for which provision has been made for payment of liabilities (fixed liabilities);
• Any amount kept for payment of contingent liabilities (excluding the amount of unpaid dividends in respect of Cumulative Preference Shares)."

(2) Reference Date for calculation of Floor Price –

(i) in the case where the initial public announcement is made by the acquirer, the date of such announcement shall be taken, provided that such announcement is made before the market closes; or

(ii) in the case where the initial public announcement is made after the market closes or on a day on which trading did not take place in the market, the date of the next trading day immediately following the date of the initial public announcement shall be taken."

VI. In Regulation 20,

i. in sub-regulation (1),

a) in place of the words, symbols and numbers "under sub-regulation (2)", the words and numbers "in accordance with Regulation 19A of these Regulations" shall be inserted;

b) in place of the words and symbols ", and the manager of the offer shall give its authorized detailed public announcement and letter of offer", the words and symbols "and its authorized detailed public announcement and letter of offer shall be given by the manager of the offer" shall be inserted;

ii. sub-regulations (2) and (3) shall be deleted;

iii. in sub-regulation (4), in place of the words, symbols and numbers "sub-regulation (2)", the words and numbers "Regulation 19A of these Regulations" shall be inserted;

VII. After Regulation 20, the following regulation shall be inserted, namely:-

"Fixed Delisting Price

20A. (1) If the acquirer (Acquirer) makes a delisting offer by adopting the Fixed Price Process, then the 'Fixed Delisting Price' (Fixed Delisting Price) shall be at least 15 percent higher than the Floor Price calculated in accordance with Regulation 19A.

(2) The acquirer (Acquirer) may make a delisting offer by adopting the Fixed Price Process only if the shares of the company are frequently traded (shares of the company are frequently traded).

(3) If the number of shares of the acquirer (Acquirer) [including the shares tendered by 'shareholders falling under the category of public shareholders' (public shareholders)] reaches up to one hundred percent after making the offer, then in such a case, he shall have to approve the equity shares tendered under the delisting offer made by him at the fixed price."

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VIII. In Regulation 21, in clause (c), after the words "Approved Price" and before the words "or price on counter offer", the word "or Fixed Price" shall be inserted;

IX. In Regulation 22,

i. in sub-regulation (3), after the word "If" and before the words "Approved Price", the words "calculated in accordance with the Tender Offer Process" shall be inserted;

ii. in place of the existing sub-regulations (4) and (5), the following sub-regulations shall be inserted, namely:-

"(4) If the delisting offer is made by adopting the Tender Offer Process, then in such a case, the acquirer (Acquirer) may give a counter-offer to 'shareholders falling under the category of public shareholders' (public shareholders), provided that:-

i. the number of shares of the acquirer (Acquirer) [including the shares tendered by 'shareholders falling under the category of public shareholders' (public shareholders)] is less than seventy-five percent; and

ii. at least fifty percent of the shares have been tendered by 'shareholders falling under the category of public shareholders' (public shareholders).

(4A) The counter-offer to be made in accordance with sub-regulation (4) may be made within two working days from the date of expiry of the right to tender, and thereafter the acquirer (Acquirer) shall comply with the time limits given in Schedule IV of these Regulations and comply with the provisions of these Regulations.

(5) The price offered in the counter-offer shall not be less than the higher of the following prices:-

i. Volume Weighted Average Price of the two shares tendered under the Tender Offer Process; and

ii. the indicative price [if any] offered by the acquirer (Acquirer).

Explanation – If the number of shares of the acquirer [including the shares tendered by 'shareholders falling under the category of public shareholders' (public shareholders)] is less than one hundred percent; then the Volume Weighted Average Price shall be calculated on the basis of all the shares tendered, and if the total number of shares is equal to or more than one hundred percent, then the Volume Weighted Average Price shall be calculated on the basis of up to one hundred percent of the shares tendered."

X. In Regulation 23,

i. in sub-regulation (2),

1. in clause (a),-

a) in place of the words "tendered equity shares", the words and symbols ", as applicable, equity shares tendered under the Tender Offer Process or under the Fixed Price Process or under the counter offer" shall be inserted;

b) the words, symbols and numbers "Schedule II or Schedule IV" shall be deleted;

c) the words and symbols "which, as applicable," inserted after the words "these regulations" shall be deleted;

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d) in sub-clause (i), after the words "Tender Offer Process" and before the words "declared", the words "or Fixed Price Process" shall be inserted;

2. in clause (c), in sub-clause (i), in place of the words "Tender Offer Process", the words and symbols ", as applicable, the Tender Offer Process or the Fixed Price Process" shall be inserted;

XI. In Regulation 24,

i. in sub-regulation (1),

1. in place of the words and symbols "made by the acquirer (Acquirer) and which has been made in the detailed public announcement]", the words, numbers and symbols "made by the acquirer (Acquirer)] or Fixed Price [which has been offered by the acquirer in accordance with sub-regulation (1) of Regulation 20A of these Regulations], which has been made in the detailed public announcement," shall be inserted;

2. in clause (i), after the words, numbers and symbols "in accordance with sub-regulation (2) of Regulation 22" and before the words "delisting offer", the words and numbers "or in accordance with the Fixed Price given under Regulation 20A" shall be inserted;

XII. In Regulation 37, in sub-regulation (2), after clause (ñ), in place of the existing explanation, the following explanation shall be inserted, namely:-

"Explanation – The reference date for calculating the Volume Weighted Average Price shall be the date on which the Securities and Exchange Board of India [Listing Obligations and Disclosure Requirements] Regulations, 2015 [SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015] (as amended from time to time) requires the stock exchanges to provide full information under Regulation 29."

XIII. After Regulation 38, the following regulation shall be inserted, namely:-

"Part E
Special Provisions for Delisting of Investment Holding Company

Delisting of equity shares of listed Investment Holding Company under the Scheme of Arrangement

38A. (1) Nothing contained in these regulations shall apply to the delisting of equity shares of any Investment Holding Company whose equity shares are being delisted under a scheme of arrangement in accordance with the order of the Court or Tribunal (Tribunal).

(2) The equity shares shall be delisted in such a manner under sub-regulation (1) -

i. the listed Investment Holding Company shall transfer (transfer) the equity shares of other listed companies (the value of which shall be calculated on a net asset basis by deducting the amount of liabilities) held by it to 'its shareholders falling under the category of public shareholders' in the same proportion in which it holds the shares;

ii. the listed Investment Holding Company shall pay to 'its shareholders falling under the category of public shareholders' the same proportion of cash (the value of which shall be calculated after deducting the amount of liabilities on a net asset basis) in exchange for the two underlying shares of unlisted companies held by it or any other assets (if any) in which it has made such investments;

iii. the two shares of the listed Investment Holding Company held by 'shareholders falling under the category of public shareholders' (public shareholders) shall be completed after transferring (transferring) the underlying shares [as mentioned in clause (i) above] and paying the cash [as mentioned in clause (ii) above] under the scheme for reduction of capital brought in accordance with Section 66 of the Companies Act, 2013 (as amended from time to time);

iv. the listed Investment Holding Company shall make a filing with the stock exchanges for delisting.

(3) The delisting of equity shares of the listed Investment Holding Company in accordance with sub-regulation (1) shall be given only after fulfilling the following ten conditions:-

i. at least seventy-five percent of the fair value of the listed Investment Holding Company shall be directly invested in the equity shares of other listed companies;

Explanation: The fair value of the listed Investment Holding Company (after deducting the amount of liabilities) shall be calculated on the basis of the joint report of two independent registered valuers (valuers), which shall also mention –

a) the value of the investment made in the shares of other listed companies in which trading is frequent (in frequently traded shares), which shall be calculated on the basis of the Volume Weighted Average Market Price of the trading days;

b) the fair value of the investment made in the shares of other listed companies in which trading is not frequent and in unlisted companies; and

c) the fair value of the other assets (assets) of the listed Investment Holding Company.

ii. the listed Investment Holding Company shall comply with the provisions of Regulation 11, Regulation 37 and Regulation 94 of the Securities and Exchange Board of India [Listing Obligations and Disclosure Requirements] Regulations, 2015 [SEBI (Listing Obligations and Disclosure Requirements)] and the circulars issued thereunder;

iii. e-voting shall be conducted for the shareholders of such a listed Investment Holding Company, in which the number of votes cast in favor of the offer shall be at least twice the number of votes cast against the offer by 'shareholders falling under the category of public shareholders' (public shareholders) of the listed Investment Holding Company;

iv. the explanation of how the entitlement ratio (Entitlement Ratio) is calculated and the important rights related to the amount payable per share shall be given in the explanatory statement to be issued along with the notice (Notice) of the meeting of the class of shareholders (Class Meeting);

v. the stock exchanges shall be provided with a draft (format) of the joint valuation report of two independent registered valuers;

vi. a certificate shall be obtained from any Chartered Accountant or Merchant Banker, in which it is certified that the entitlement ratio (Entitlement Ratio) is correct;

vii. the shares of the listed Investment Holding Company shall be listed for at least 3 months and shall be listed at the time of making the delisting offer;

viii. no order has been passed or issued by the Board against the listed Investment Holding Company and its promoters (Promoters) or promoter group (Promoter Group) in the preceding three years; and

[भाग III—खण् ड 4] भारत का रािपत्र : असाधारण 9
ix. इस प्रकार असूचीबद्ध (डीजलस्ट्ट) हुई सूचीबद्ध (जलजस्ट्टड) इन्िेस्ट्टमेंट होसल्डंग कं पिी के इक्विटी
िेयरों को असूचीबद्ध (डीजलस्ट्ट) होिे की तारीख से तीि िषों की अिजध तक क्वफर से सूचीबद्ध (जलस्ट्ट) होिे की मंिूरी िहीं दी िाएगी:
परंत यह क्वक इस प्रकार उन्हें इि जिजियमों के जिजियम 40 के उप-जिजियम (3) और उप-जिजियम (4) के अि सार क्वफर से सूचीबद्ध (जलस्ट्ट) कराया िाएगा । (4) इन्िेस्ट्टमेंट होसल्डंग कं पिी के इक्विटी िेयरों की असूचीबद्धता (डीजलसस्ट्टंग) तभी की िा सके गी िब जित्तीय क्षेत्र के उस जिजियामक (रेग्यूलेटर) द्वारा जिधाडठरत की गई ितों आक्वद का पालि कर जलया िाए, िो उस इन्िेस्ट्टमेंट होसल्डंग कं पिी को जिजियजमत (रेग्यूलेट) करता हो ।” बबीता राय डू, कायडपालक जिदेिक [जिज्ञापि-III/4/असा./526/2024-25] पाद ठटप्पण :
क) भारतीय प्रजतभूजत और जिजिमय बोडड [इक्विटी िेयरों की असूचीबद्धता (डीजलसस्ट्टंग)] जिजियम, 2021, सं. सेबी/एल.ए.डी.- एि.आर.ओ./िी.एि./2021-25 द्वारा, 10 िूि, 2021 को भारत केरािपत्र मेंप्रकाजित हुए थे। ख) भारतीय प्रजतभूजत और जिजिमय बोडड[इक्विटी िेयरों की असूचीबद्धता (डीजलसस्ट्टंग)] जिजियम, 2021 तत्पिात्,- (1) 3 अगस्ट्त, 2021 को भारतीय प्रजतभूजत और जिजिमय बोडड (रेग्यूलेटरी सैंडबॉक्सस) (संिोधि) जिजियम, 2021, सं. सेबी/एलएडी-एिआरओ/िीएि/2021/30, द्वारा संिोजधत हुए थे । SECURITIES AND EXCHANGE BOARD OF INDIA NOTIFICATION Mumbai, the 25th September 2024 SECURITIES AND EXCHANGE BOARD OF INDIA (DELISTING OF EQUITY SHARES) (AMENDMENT) REGULATIONS, 2024 No. SEBI/LAD-NRO/GN/2024/206.—In exercise of the powers conferred by section 31 read with section 21A of the Securities Contracts (Regulation) Act, 1956 (42 of 1956) and section 30, sub-section (1) of section 11 and sub-section (2) of section 11A of the Securities and Exchange Board of India Act, 1992 (15 of 1992), the Board hereby makes the following regulations to further amend the Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2021, namely: –

1. These regulations may be called the Securities and Exchange Board of India (Delisting of Equity Shares)
   (Amendment) Regulations, 2024.
2. They shall come into force on the date of their publication in the Official Gazette:
   Provided that the provisions of these regulations shall be applicable to such delisting offers whose initial public announcement is made on or after the date of coming into force of these regulations:
   Provided further that an acquirer may make the delisting offer in terms of the provisions of the Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2021 as they existed before the coming into force of these regulations till the sixtieth day from the date of publication of these regulations in the official gazette.
3. In the Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2021, ─
   I. in regulation 2, in sub-regulation (1),
   i. after clause (l), the following clause shall be inserted, namely,-
   “la) “fixed delisting price” means the fixed price offered by the acquirer for undertaking delisting of the equity shares of the company through fixed price process;”

10 THE GAZETTE OF INDIA : EXTRAORDINARY [PART III—SEC.4]
ii. the existing clause (m) shall be substituted by the following clause, namely,-
“(m) “floor price” means the minimum price offered by the acquirer in terms of regulation 19A of these regulations, while making the proposal for voluntarily delisting of the equity shares of the company;”
iii. after clause (r), the following clause shall be inserted, namely,-
“ra) “Investment Holding Company” means a company which holds investments in listed or unlisted companies or holding assets other than such investments;”
II. in regulation 14,
i. the existing sub-regulation (1) shall be substituted by the following sub-regulation, namely,
“(1) The acquirer shall open an interest bearing escrow account with a Scheduled Commercial Bank, not later than seven working days from the date of obtaining the shareholders’ approval, and deposit therein an amount equivalent to twenty-five percent of the total consideration, calculated as below –
i. in case delisting is proposed through reverse book building process; the total
consideration shall be calculated on the basis of the number of equity shares outstanding with the public shareholders multiplied with the floor price or the indicative price, if any given by the acquirer in terms of sub-regulation (4) of regulation 20 of these regulations; whichever is higher;
ii. in case delisting is proposed through the fixed price process; the total
consideration shall be calculated on the basis of the number of equity shares outstanding with the public shareholders multiplied with the fixed delisting price offered by the acquirer.”
ii. the existing sub-regulation (3) shall be substituted by the following sub-regulation, namely,
“(3) Before making the detailed public announcement under regulation 15 of these regulations, the acquirer shall deposit in the escrow account, the remaining consideration amount being seventy-five percent of the total consideration amount calculated in terms of sub-regulation (1).”
III. in regulation 17,
i. in the marginal heading, after the word “Bidding” and before the word “mechanism”, the
symbol and word “/ tendering” shall be inserted;
ii. in sub-regulation (1), the words “The bidding period shall start not later than” shall be
substituted by the words and symbols “In case delisting is proposed through the reverse book building process or through fixed price process, the bidding period or the tendering period, as the case may be, shall begin within”;
iii. in sub-regulation (2), after the words “shall facilitate” and before the words “tendering of
shares”, the word “the” shall be inserted;
iv. in sub-regulation (3), -

1. after the words “reverse book building process” and before the words “is
   announced within two hours”, the words and symbols “or the fixed price process, as the case may be,” shall be inserted;
2. after the words “bidding period” and before the symbol “.”, the words “or the
   tendering period” shall be inserted;
   v. the exiting sub-regulation (4) shall be substituted by the following sub-regulation, namely,-
   “(4) The acquirer through the Manager to the offer shall, within two working days from the closure of the bidding period or the tendering period, make a public announcement in the same newspapers in which the detailed public announcement under sub-regulation (1) of regulation 15 of these regulations was made, of the success or failure of the fixed price delisting process or the reverse book building process and also disclose the discovered price accepted by acquirer, in the event of success of the reverse book building process.”

[भाग III—खण् ड 4] भारत का रािपत्र : असाधारण 11
IV. in regulation 19,
i. in the marginal heading, the words “reverse book building process” shall be substituted by
the words “delisting process”;
ii. in sub-regulation (1),
a) the word “Public” shall be substituted by the words “The public”; b) after the words “participate in the” and before the words “reverse book building process”, the words “fixed price process or in the” shall be inserted;
iii. in sub-regulation (3),
a) after the words “on the basis of” and before the words “underlying equity shares”, the word “the” shall be inserted; b) the words “reverse book building” shall be substituted by the word “delisting”; c) in the proviso, the words “reverse book building” shall be substituted by the word “delisting”;
V. after regulation 19, the following regulation shall be inserted, namely-
“Floor Price
19A (1) The floor price of the equity shares proposed to be delisted through reverse book building process or through fixed price process, as the case may be, shall not be less than the highest of the following:
(i) volume weighted average price paid or payable for acquisitions by the acquirer along with persons acting in concert, during the 52 weeks immediately preceding the reference date; (ii) the highest price paid or payable for any acquisition by the acquirer along with persons acting in concert during the 26 weeks immediately preceding the reference date; (iii) adjusted book value (considering consolidated financials) as determined by an independent registered valuer:
Provided that adjusted book value shall not be applicable in case of delisting of Public Sector Undertakings.
(iv) the volume weighted average market price for a period of 60 trading days immediately preceding the reference date on the stock exchange where the maximum trading volume of the equity shares is recorded, provided such shares are frequently traded; (v) the price determined by an independent registered valuer taking into account valuation parameters such as the book value, comparable trading multiples and any other customary valuation metrics for valuation of shares of companies in the same industry where the shares are not frequently traded. Explanation: The adjusted book-value of the company shall be calculated as below – A+B+C+D – L, where, ‘A’ shall be the book value of all the assets (other than jewellery, artistic work, shares & securities and immovable property) in the balance sheet as reduced by any amount shown as asset including the unamortised amount of deferred expenditure which does not represent the value of any asset; ‘B’ shall be the price which jewellery and artistic work would fetch if sold in the open market on the basis of the valuation report obtained from a registered valuer; ‘C’ shall be the fair market value of unquoted/infrequently traded shares and securities as determined considering the internationally accepted valuation methods by the registered valuer. If the shares and securities are quoted and frequently traded on any recognized stock exchange, the fair market value of such shares and securities shall be the transaction value as recorded in such stock exchange as on the valuation date; ‘D’ shall be the value adopted or assessed or assessable by any authority of the Government for the purpose of payment of stamp duty in respect of the immovable property. In case immovable property is located outside India, market value of the property shall be determined by the independent registered valuer; ‘L’ shall be the book value of liabilities shown in the balance sheet, but not including the following amounts, namely:—

12 THE GAZETTE OF INDIA : EXTRAORDINARY [PART III—SEC.4]  the paid-up capital in respect of equity shares;  the amount set apart for payment of dividends on preference shares and equity shares where such dividends have not been declared before the date of transfer at a general body meeting of the company;  reserves and surplus, by whatever name called, even if the resulting figure is negative, other than those set apart towards depreciation;  any amount representing provisions made for meeting liabilities, other than ascertained liabilities;  any amount representing contingent liabilities other than arrears of dividends payable in respect of cumulative preference shares. (2) The reference date for computing the floor price shall be – (i) the date of initial public announcement made by the acquirer, if such an announcement was made before the close of market hours; or (ii) the trading day next to the date of the initial public announcement, if such an announcement was made after the close of market hours or on a non-trading day.”
VI. in regulation 20,
i. in sub-regulation (1),
a) the words and symbols “under sub-regulation (2)” shall be substituted by the words and numbers “in terms of regulation 19A of these regulations”; b) the words and symbol “, and the Manager to the offer shall disclose the same” shall be substituted by the words “ and shall be disclosed”; c) after the words “letter of offer” and before the symbol “.”, the words “by the Manager of the offer” shall be inserted;
ii. sub-regulations (2) and (3) shall be omitted;
iii. in sub-regulation (4), the words and symbols “sub-regulation (2)” shall be substituted by
the words and numbers “regulation 19A of these regulations”;
VII. after regulation 20, the following regulation shall be inserted, namely-
“Fixed Delisting Price
20A (1) In case the acquirer has proposed delisting through fixed price process; the acquirer shall provide a fixed delisting price which shall be at least 15 percent more than the floor price calculated in terms of regulation 19A. (2) The acquirer shall be eligible to undertake delisting through fixed price process only if the shares of the company are frequently traded. (3) The acquirer shall be bound to accept the equity shares tendered or offered in the delisting offer, if the post-offer shareholding of the acquirer along with the shares tendered by the public shareholders reaches 90 percent at the fixed delisting price, offered by the acquirer.”
VIII. in regulation 21, in clause (a), after the words “discovered price” and before the words “or the counter offer
price”, the words “or the fixed price” shall be inserted;
IX. in regulation 22,
i. in sub-regulation (3), after the words “discovered price” and before the words “is higher
than”, the words “pursuant to reverse book building process” shall be inserted;
ii. the existing sub-regulations (4) and (5) shall be substituted by the following subregulations, namely,
“(4) In case of delisting through reverse book building process; a counter-offer may be made by the acquirer to the public shareholders, provided -
i. the post-offer shareholding of the acquirer, along with the shares tendered by
public shareholders, is not less than seventy-five percent; and
ii. not less than fifty percent of the public shareholding has been tendered.

[भाग III—खण् ड 4] भारत का रािपत्र : असाधारण 13 (4A) The counter-offer in terms of sub-regulation (4) may be made within two working days of the closure of the bidding period and thereafter the acquirer shall ensure compliance with the provisions of these regulations in accordance with the timelines provided in Schedule IV of these regulations. (5) The counter offer price shall not be less than the higher ofi. volume weighted average price of the shares tendered/offered in the reverse book building process; and
ii. the indicative price, if any, offered by the acquirer.
Explanation-If the cumulative shareholding of the acquirer, along with the shares tendered or offered by the public shareholders is less than ninety percent; the volume weighted average price shall be calculated taking into account all the shares tendered or offered and if the cumulative shareholding is equal to or higher than ninety percent, the volume weighted average price shall be calculated taking into account the shares tendered or offered up to ninety percent.”
X. in regulation 23,
i. in sub-regulation (2),
a) in clause (a),-

1. the words and symbol “tendered/offered”, shall be substituted by the words and
   symbols “tendered or offered under the reverse book building process or the fixed price process or the counter-offer, as the case may be,”;
2. the words “Schedule II or Schedule IV of ” shall be omitted;
3. The words “as the case may be”, appearing after the words “these regulations” and
   before the words and symbol “, shall be released”, shall be omitted;
4. in sub-clause (i),-
   a. after the words “reverse book building process” and before the words “under sub-regulation (3) of regulation 17”, the words “or the fixed price process” shall be inserted; b. the symbol “/” appearing between the words “tendered” and “offered” shall be substituted by the word “or”; b) in clause (c), in sub-clause (i), after the words “reverse book building process” and before the words “under sub-regulation (3) of regulation 17”, the words and symbols “or the fixed price process, as the case may be, ” shall be inserted;
   XI. in regulation 24,
   i. in sub-regulation (1),
   a) after the words “regulation 20 of these regulations” and before the words and symbol “, as stated in the public announcement”, the words “or fixed price offered by the acquirer in terms of sub-regulation (1) of regulation 20A of these regulations” shall be inserted; b) in clause (i) thereof, after the words “regulation 22” and before the words “of these regulations”, the words “or in terms of fixed price as provided under regulation 20A” shall be inserted;
   XII. in regulation 37, in sub-regulation (2), after clause (j), the existing Explanation shall be substituted with the
   following Explanation, namely,-
   “Explanation —The reference date for computing the volume weighted average price would be the date on which the prior intimation is required to be given to the stock exchanges under regulation 29 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended from time to time.”

14 THE GAZETTE OF INDIA : EXTRAORDINARY [PART III—SEC.4]
XIII. after regulation 38, the following regulation shall be inserted namely,-
“Part-E
SPECIAL PROVISIONS FOR DELISTING OF INVESTMENT HOLDING COMPANY Delisting of equity shares of a listed investment holding company pursuant to a scheme of arrangement 38A (1) Nothing contained in these regulations shall apply to the delisting of equity shares of an investment holding company, pursuant to a scheme of arrangement by an order of a Court or Tribunal. (2) Delisting of equity shares made under sub-regulation (1) shall be undertaken, in the following manneri. the listed investment holding company shall transfer the equity shares (value as calculated on a net of pro-rata liabilities) held by it in other listed companies, to its public shareholders in proportion to their shareholding;
ii. the listed investment holding company shall make payment in cash (value as
calculated on a net of pro-rata liabilities) in exchange for the underlying shares or investments made by such investment holding company in unlisted companies and other assets, if any, to its public shareholders in proportion to their shareholding;
iii. public shareholding of the listed investment holding company shall be extinguished
upon transfer of the underlying shares mentioned at (i) and payment in cash mentioned at (ii), pursuant to a scheme for selective reduction of capital under
Section 66 of the Companies Act, 2013, as amended from time to time; and
iv. the listed investment holding company shall apply to the stock exchanges for
delisting.
(3) The delisting of the equity shares of an investment holding company in terms of subregulation (1) shall be permitted, subject to the fulfilment of the following conditions :-
i. the listed investment holding company shall have not less than seventy-five
percent of its fair value comprising direct investments in equity shares of other listed companies; Explanation: The fair value (net of liabilities) of the listed investment holding company shall be determined pursuant to a joint report by two independent registered valuers, which, inter-alia, shall includea) value of investments of frequently traded shares of listed companies based on sixty trading days volume weighted average market price; b) fair value of investments of infrequently traded shares of listed companies and unlisted companies; and c) fair value of other assets of the listed investment holding company.
ii. the listed investment holding company shall comply with regulations 11, 37 and 94
of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the Circulars issued thereunder;
iii. there shall be e-voting by shareholders of such listed investment holding company
wherein votes cast by public shareholders of the listed investment holding company in favour of the proposal are not less than two times the number of votes cast against it;
iv. the material disclosures in relation to calculation of the entitlement ratio and per
share consideration is included in the explanatory statement of the notice for the shareholders meeting;
v. the joint valuation report obtained by two independent registered valuers shall be
submitted to the stock exchanges along with draft scheme for disclosure to public;
vi. the report from a chartered accountant or merchant banker confirming the
entitlement ratio is obtained;
vii. the shares of the listed investment holding company shall have been listed for not

[भाग III—खण् ड 4] भारत का रािपत्र : असाधारण 15 less than 3 years and shall not be suspended at the time of taking this route;
viii. no adverse orders have been passed by the Board against the listed investment
holding company and their promoters or promoter group in the last three years; and
ix. the equity shares of the listed investment holding company so delisted, shall not be
permitted to seek relisting for a period of three years from the date of delisting:
Provided that such relisting shall be in terms of sub-regulation (3) and (4) of regulation 40 of these regulations.
(4) The delisting of the equity shares of an investment holding company shall also be subject to the compliance with any requirement specified by any financial sector regulator with whom such investment holding company is regulated.” BABITHA RAYUDU, Executive Director [ADVT.-III/4/Exty./526/2024-25] Footnotes:

1. The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2021 were published in the
   Gazette of India on June 10, 2021 vide No. SEBI/LAD-NRO/GN/2021-25.
2. The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2021 were subsequently
   amended on, –
   (2) 3 rd August, 2021 by the Securities and Exchange Board of India (Regulatory Sandbox) (Amendment) Regulations, 2021 vide No. SEBI/LAD-NRO/GN/2021/30.

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