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History In the earlier days, the public issues of shares and
their pricing was looked after by the Controller of
Capital Issues (CCI).
1992, the same is being looked after by Securities
and Exchange Board of India (SEBI).
The purpose of establishing SEBI and the SEBI
Act, 1992 was to protect the interests of the investors
in securities and to romote the develo ment of, and
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Meaning
LISTING = STOCK EXCHANGES + COMPANY
DELISTING = STOCK EXCHANGES -COMPANY
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Delisting
Compulsory Voluntary
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publicnotice andinformationto allstockexchangeswherethesharesofthecompany arelisted and alsoonitstradingsystem
andwebsites
Appointmentofindependentvaluer
Determinationoffair valueofshares
Acquisitionofshares bythe promoters atdeterminedfair value
company/promoters/PAC/Directorscanneither accesssecuritiesnor seeklistingfor a periodof 10 years
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Voluntary delisting process flowchartConvene Board meeting to approve delisting & to appoint Merchant Banker &
otherintermediaries & send the outcome of the Board meeting tothe StockExchange.
Passspecial resolution through Postal Ballot.
File application tothe concerned Stock Exchange(s) fortaking approval
for Delisting along withthe auditreport.
Received approval fromthe concernedexchange
Calculation of Floorprice.
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Open Escrowaccount & depositthe amount equal tothe consideration to be payable
tothe outstanding Public Shareholders equityshares determined on the basisof Floor
price calculated above.
Public announcement bythe Promotersin atleastone English National
Daily,one Hindi National Dailywithwide circulation & one regional
language newspaperof the region where the concerned recognized Stock
Exchange is located.
Determine the listof Shareholderstowhomthe letter
of offeristo be sent.
Dispatchthe letterof offertothe public along withthe bidding
form & the formof tendering the sharesin the Reverse BookBuilding Process.
Opening of Offer.
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Date of Closing of Offer
Minimum Bidsreceived. Minimum Bids notreceived
Failure tooffer
Public announcementin the newspaper for acceptance/rejection or failure
of offer.
Promoter accepted
the final price
Promoter accepted the
final price
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Deposit additional amounttothe escrow
account & shall simultaneouslyopen special
accountin which all considerationdeposited in the Escrowaccountshall be
transferred.
Shall return the tendered
sharestothe shareholderswithin 10 working daysfromclosing of offer.
Paymenttothe shareholderswhohavetendered theirsharesin the bidding process
Final application tothe stock exchange
Delisting order bythe stock exchange
Remaining shareholderscan tendertheirsharesover a period of
one year atthe same price tothe promoter.
Release of EscrowAccount
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Comparison between Old & New
Regulations
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ParticularsSecurities And Exchange
Board of India (Delisting of
Securities) Guidelines, 2003
Securities And Exchange Board
of India (Delisting Of Equity
Shares) Regulations, 2009.
Coverage Allkindof Securities arecovered
Only Equity Shares areCovered
Definitions-Exchange Thereis a conceptofthe
DelistingExchange andExchange
Boththeearlier definitions
merged and a definitionofRecognized Stockexchangeis
inserted
Definitions-Public Shareholding The Publicshareholdingisthe
shareholdingin a companyof
the personsother thanthePromoters, Persons Actinginconcertwiththe Promoter
The publicshareholdingisthe
shareholdingin a companyof
the personsother thanthePromoters, Persons Actinginconcertwiththe Promoter ,
holdersof Depositors receiptsandthecustodianthereof .
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Particulars Securities And ExchangeBoard of India (Delisting
of Securities) Guidelines,
2003
Securities And Exchange
Board of India (Delisting Of
Equity Shares) Regulations,
2009.
Definitions-WorkingDays WorkingDays arenotdefined
Workingdays aredefined astheworkingdaysoftheSEBI.
Applicability Widely defined Not widely defined.
Inapplicability Not mentioned exclusively
and separately.
Separate section is made. The
exemption is available to the
companies which have been
declared sick & their
reconstruction scheme provides
the delisting including the
provisions of the exit option to
the shareholders.
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ParticularsSecurities And Exchange Board
of India (Delisting of Securities)
Guidelines, 2003
Securities And Exchange
Board of India (Delisting Of
Equity Shares) Regulations,
2009.
Voluntary delisting The procedure and provisions of
both kind of Delisting a) Without
Exit option and b) With exit option
merged and no separate sections
were there.
The procedures for both kind of
Delisting a) Without Exit option
and b) With exit option are
defined and provided in an
identifiable manner.
Specified Date No concept of specified date, on
which the list of eligible public
shareholders can be determined to
whom the Letter of Offer will be
sent for Delisting.
The concept of Specified date
introduced, which is 30 days from
the date of the Public
Announcement, on which the
shareholders list be freezed towhom the letter of offer will be sent
for the Delisting.
Bidding period Only minimum time mentioned
during which the bidding Period
remain open which is 3 days
The bidding period will now be
3 days to 5 days and should
start within 55th day of the
public announcement.
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Particulars Securities And ExchangeBoard of India (Delisting of
Securities) Guidelines, 2003
Securities And Exchange
Board of India (Delisting
Of Equity Shares)
Regulations, 2009.
Right of remaining shareholders The shareholders who could not participate
in the Delisting offer can offer their shares
to the promoters during a period of 6
months after the Delisting.
The shareholders who could not
participate in the Delisting offer can
offer their shares to the promoters
during a period of 1 year after the
Delisting.
Small Companies No special provisions are there for the
small companies. They have to follow
the same provisions as the Large and
big companies have to.
Special provisions under the
separate section be given for the
small companies and winding up
companies. They need not to
follow the Reverse Book Building
process.
Reinstatement of securities The companies cannot be relisted at
the exchange for a period of 2 years
from the period of delisting.
The companies delisted voluntarily
cannot be relisted for a period 5 years
and the companies compulsorily
delisted cannot be relisted for a periodof 10 years from the date of delisting
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Comparison between Voluntary and
Compulsory Delisting
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Criteria Compulsory DelistingVoluntary Delisting from all
the Exchange(s)
InitiativeAction Any Recognized Stock
Exchange makes an order to
delist the equity shares of a
company.
Any Company can voluntarily
apply to the concerned stock
exchange(s) for delisting.
Grounds Delisting order can be made on the
non-fulfillment of the listing
regulations of the respective
exchange and on any other ground
prescribed in the rules made under
section 21A of SCRA, 1956.
The Company either for cost
benefit, or to comply with any of
the rules and regulations etc may
seek delisting from any of the
exchange.
Public Notice Public Notice in this case be given
by the Exchange
Public notice and all
announcements be given by the
Promoters of the company.
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Criteria Compulsory Delisting Voluntary Delisting from
all the Exchange(s)
Approvals The Panel of Experts has to
take the decision after giving a
reasonable opportunity of
being heard to all the persons
who may be aggrieved by the
Delisting of the company.
The Company seeking
voluntary delisting shall take
the approval of the concerned
stock exchange(s) and also of
public shareholders.
General Meeting of the
shareholders
No need of the General
meeting of the shareholders
Shareholders resolution to be
passed through Postal ballot.
Appointment of Merchant
Banker
The complete process is
monitored by the Panel of
Experts
The complete process is
monitored by the Merchant
Bankers
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Criteria Compulsory Delisting Voluntary Delisting from allthe Exchange(s)
Exit Price To be calculated by the
Independent value at which the
Promoter should take the shares
from the Public shareholders.
The price to be determined on
the basis of the past trading data
or book values of the company
by the promoters in consultation
by the Merchant Banker
Reverse Book Building process No bids are invited from the
Shareholders for determination of
the Final Price
Complete process of Reverse Book
Building is to be completed for
determination of the Final Price.
Debarred from the securities
market
The company/
Promoters/Directors are
debarred from the securities
market for a period of 10 years
The company can not relist its
securities for a period of 5
years.
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ILLUSTRATIONS
ATLAS COPCO (INDIA) LTD.
VOLUNTARY DELISTING
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Company Profile The Companyis a public limited companyincorporated under
the Indian Companies Act, 1956, having its registered office at
Sveanagar, Mumbai Pune Road, Dapodi, Pune-411012, India.
The Equity Shares are listed on the Bombay Stock ExchangeLimited (BSE) and Pune StockExchange (PSE).
Atlas India is a company promoted by the Promoter. ThePromoter of the Company was holding 18,899,360 EquityShares on date 18-feb-2011 representing 83.77% of the paid
up equityshare capital of the Company.
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CONVENE BOARD MEETING On October 28, 2010, the Promoter informed the Company
of its intention to make the DelistingOffer and requested the
board of directors of the Company to convene a meeting toconsider the Delisting Offer and to communicate andrecommend the said proposal for approval by theshareholders in accordance with the delistingRegulations.
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The board of directors of the Company vide itsresolution dated October 29, 2010, approved theproposal received from the Promoter to initiate the
Delisting Offer in accordance with the provisions of theDelisting Regulations, subject to applicable law and toseekapproval of the shareholders of the Company.
A special resolution has been passed bythe shareholders
of the Companythrough postal ballot, the result of whichwas declared on December 24, 2010, approving theproposed delisting of the Equity Shares from the BSEand PSE in accordance with the DelistingRegulations.
SPECIAL RESOLUTION THROUGHPOSTAL BALLOT
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In-principal Approval By Stock
Exachange
The votes cast by Public Shareholders in favour ofthe Delisting offer were more than two times thenumber of votes cast by the Public Shareholdersagainst it. The BSE has issued its in-principleapproval to the Delisting Offer vide letter datedJanuary 25, 2011, subject to compliance with theDelistingRegulations.
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ReceiptofIn-principal Approval
The BSE hasissueditsin-principle approval
tothe DelistingOffer videletter dated January25, 2011,subjecttocompliancewiththe
DelistingRegulations.
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Calculation OfFloor Price Thefloor pricefor the Equity Shareswasdetermined
bythe Promoter inconsultationwith Manager tothe
Offer to be ` 1426/- (Rupees One Thousand FourHundred Twenty Six Only) per equityshare.
The Floor Pricewas arrived at as per the ValuationReportdated 18th November, 2010 ofM/s. SSPA &Co.,theChartered Accountants .
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ESCROW ACCOUNT
In accordance with the Delisting Regulations, the Promoter,Citibank NA (the Escrow Bank) and the Manager to the
Offer have entered into an escrow agreement dated February7, 2011 subsequent to which the Promoter has opened anescrowaccount with the EscrowBankat their branch at D.N.Road, Fort, Mumbai-400.001.
The Escrow Bank has issued, pursuant to bank guaranteeletter dated February 17, 2011 in favour of the MerchantBanker for an aggregate amount of `550,00,00,000/- (Fivehundred and FiftyCrores Rupees only).
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PUBLIC ANNOUNCEMENT The Public Announcementhas beenissuedinthe
followingnewspapers as requiredunder Regulation
10(1) ofthe DelistingRegulations:NEWSPAPER LANGUAGE EDITIONS
Business Standard English & Hindi ALL
Loksatta Marathi Pune
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CONTD..
An public announcementconsistsoffollowing
The floor price and the offer price and how theywere arrivedat.
The dates of openingand closing of the offer.
The name of the exchange from which the equity shares aresought to be delisted.
The manner in which the offer can be accepted by the
shareholders.
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PROPOSED TIMETABLE FOR
THE OFFER
ACTIVITY DATE
Date of publication of the PA February 18, 2011
Specified Date for determining the names of shareholders to
whom the Offer Letters shall be sent
February 18, 2011
Dispatch of Offer Letters/Bid Forms to Public Shareholders as on
Specified Date
February 22, 2011
Bid OpeningDate (10.00 am) March 7, 2011
Bid ClosingDate (3.00 pm) March 11, 2011
Announcement of Discovered Price/Exit Price and the PromotersAcceptance/Non-acceptance of Discovered Price/Exit Price
March 23, 2011
Return of Equity Shares to shareholders i n case of f ailure of
DelistingOffer/Bids have not been accepted
March 25, 2011
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ACCEPTANCE OF FINAL PRICE If promoter accept the final price then he will
deposit the additional amount in the escrow
account and will simultaneouslyopen a special
account which shall be used for payment to
the Public Shareholders who have tendered
Equity Shares in the DelistingOffer
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FINAL STEPS
Paymenttotheshareholderswhohavetenderedtheresharesinthe
biddingprocess
Final applicationtostockexchange
Delistingorder bystockexchange
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