The delisting can also be compulsory in case the company fails to comply with listing obligations of the stock exchange. It could be in many ways such as non-payment of listing fee, investor complaints, or unfair trading practices.
The services of a merchant bank are of much use when a company decides to voluntarily delist its securities. The delisting is done under the guidelines issued by SEBI according to which the first step would be to obtain board approval and then that of the shareholders in shape of a special resolution. A general meeting is conveyed in which the proposal of delisting is presented to obtain consent of the shareholders. A certified copy of this resolution and details of the shareholders is submitted to the said stock exchange from where the company is delisting.
The company has to file required forms with the concerned registrar within thirty days from the date on which the resolution was passed. To provide an exit opportunity to investors of the region offer price of the securities is calculated the floor price is average trading price of preceding twenty-six weeks. The promoter appoints merchant bank for deciding the offer price based on reverse book building process. The promoter has to make a public announcement of the delisting providing inter-alia information including floor price, methodology followed for calculation of offer price, opening and closing date of the offer, and stock market data. Merchant banker companies in India is involved in appointment of trading members, determination of offer price, and settlement process. To protect interests of the investors SEBI has passed delisting guidelines which make it necessary to send offer letter to every shareholder. There is no need of providing an exit route and offer letter, in case the company is listed on a national exchange as the investors can themselves exit by selling their shares as and when they want to give away their ownership.
Corporate Capital Ventures is SEBI registered Merchant Bank working closely with nationwide and regional stock exchanges. It provides consultation services for listing and delisting of shares. CCV has emerged as a leading brand with most professional services provided by a team of market experts.
Conclusion: Merchant Banks provide many financial services to corporates and their assistance is valuable in case of voluntary delisting.
With the emergence of nationwide trading terminals, regional exchanges have lost their relevance also SEBI has de-recognized majority of them. Most companies listed on a regional exchange seek delisting to avoid regulatory obligations and do away with the listing fee. The delisting can also be compulsory in case the company fails to comply with listing obligations of the stock exchange. It could be in many ways such as non-payment of listing fee, investor complaints, or unfair trading practices.
The services of a merchant bank are of much use when a company decides to voluntarily delist its securities. The company delisting in stock exchange is done under the guidelines issued by SEBI according to which the first step would be to obtain board approval and then that of the shareholders in the shape of a special resolution. A general meeting is conveyed in which the proposal of delisting is presented to obtain the consent of the shareholders. A certified copy of this resolution and details of the shareholders is submitted to the said stock exchange from where the company is delisting.
The company has to file required forms with the concerned registrar within thirty days from the date on which the resolution was passed. To provide an exit opportunity to investors of the region offer price of the securities is calculated the floor price is the average trading price of preceding twenty-six weeks. The promoter appoints merchant bank for deciding the offer price based on reverse book building process. The promoter has to make a public announcement of the delisting providing inter-alia information including floor price, the methodology followed for calculation of offer price, opening and closing date of the offer, and stock market data. The merchant bank is involved in the appointment of trading members, determination of offer price, and settlement process. To protect interests of the investors SEBI has passed delisting guidelines which make it necessary to send an offer letter to every shareholder. There is no need of providing an exit route and offer letter, in case the company is listed on a national exchange as the investors can themselves exit by selling their shares as and when they want to give away their ownership.
Corporate Capital Ventures is SEBI registered Merchant Bank, working closely with nationwide and regional stock exchanges. It provides consultation services for listing and delisting of shares. CCV has emerged as a leading brand with most professional services provided by a team of market experts.