SEBI contemplates delisting via fixed price; New rules on corporate disclosures in pipeline

SEBI Chairperson Madhabi Puri Buch announces plans to consider delisting of companies through fixed price instead of reverse book-building, while also intending to strengthen insider trading regulations.

The Securities and Exchange Board of India (SEBI) is mulling over a significant change in the delisting process, with Chairperson Madhabi Puri Buch announcing on Monday that the regulator will explore the possibility of allowing companies to delist via a fixed price mechanism, instead of the conventional reverse book-building procedure. The move comes as SEBI aims to streamline the delisting process and enhance price discovery efficiency.

Currently, delisting companies adopt the reverse book-building method, wherein they capture sell orders from shareholders through Book Running Lead Managers (BRLMs) during a specified period. The process involves offers being collected from shareholders at various prices, equal to or above the floor price, with the final buyback price determined after the offer closing date.


To foster greater participation and provide a viable alternative, SEBI is considering the introduction of a fixed price mechanism, which would allow promoters to place a delisting offer at a predetermined price for shareholders to evaluate and respond. This approach is expected to simplify the delisting process, making it more accessible and transparent for all stakeholders involved.

In line with these developments, SEBI is set to issue a discussion paper on the subject by December, seeking inputs and opinions from market participants before finalizing the regulatory changes.

Furthermore, the market regulator is looking to bolster rules governing corporate disclosures related to insider trading regulations. The move is aimed at promoting greater transparency and integrity in the trading of securities, ensuring that all market participants have access to essential information and are equipped to make informed decisions.

Regarding mutual fund fee structures, Buch mentioned that SEBI is actively considering a revamp, and the feedback received from the industry is currently under review. This move aims to promote a fair and equitable fee structure for mutual fund investors, fostering a conducive environment for growth in the mutual fund industry.

The proposed changes are part of SEBI’s ongoing efforts to enhance market efficiency, safeguard investor interests, and maintain the integrity of India’s financial markets. By exploring innovative approaches and soliciting feedback from stakeholders, the regulator seeks to create a more robust and investor-friendly ecosystem for the benefit of all market participants. As SEBI’s initiatives progress, market participants and investors eagerly await the implementation of these critical regulatory updates.