What is the process for voluntary delisting of a listed company's shares under SEBI regulations?

Question

The promoters of our listed company want to take it private through voluntary delisting. What does the SEBI delisting process require? I have been reading conflicting things online and I would like to understand what Indian law actually says about this, which Act and Section applies, what the realistic timelines and costs are, and what I should be doing right now to protect my position. If the matter can be resolved without litigation I would prefer that route, but I want to know what my rights are before I agree to anything or sign any document.

MyVakeel Legal Desk · Accepted Answer

What is the process for voluntary delisting of a listed company's shares under SEBI regulations? is governed in India primarily by SEBI Delisting of Equity Shares Regulations 2021, Regulation 3, SEBI Delisting of Equity Shares Regulations 2021, Regulation 17 and Companies Act 2013, Section 68. The short answer is set out below, followed by the practical steps most people in this situation need to take. Read it alongside the specific provisions named, because the exact relief available to you turns on the facts you can prove on paper.

Regulation 3 of the SEBI Delisting of Equity Shares Regulations 2021 requires the promoter or acquirer to obtain board approval and shareholder approval by special resolution before making a public announcement of the intention to delist the company's shares.

The exit price for delisting is discovered through the reverse book building mechanism under Regulation 17, where public shareholders bid the price at which they are willing to tender shares, and delisting succeeds only if the promoter's shareholding along with shares tendered reaches ninety percent of total issued shares and specified minimum public shareholder participation thresholds are met.

If the promoter chooses to acquire shares through a buy-back structure instead of delisting, Section 68 of the Companies Act 2013 separately governs share buy-backs, including the twenty-five percent of paid-up capital and free reserves ceiling and the mandatory cooling-off period before a fresh buy-back.

Public shareholders who do not tender their shares during the delisting process but wish to exit later can typically do so within a specified exit window at the discovered price, subject to the timelines prescribed in the Regulations.

Failure to achieve the requisite threshold results in the delisting offer failing, and the company continues to remain listed, with the promoter barred from making a fresh delisting attempt for a specified cooling-off period.

What to do next: 1) Obtain board and shareholder special resolution approval before the public announcement; 2) Appoint a merchant banker to manage the reverse book building process; 3) Ensure the ninety percent threshold and minimum public participation conditions are tracked during the bidding period; 4) Consult securities law counsel to structure the exit price mechanism and shareholder communication.

If the other side has already issued a notice, filed a case or set a deadline, treat the matter as time-sensitive — most remedies under SEBI Delisting of Equity Shares Regulations 2021, Regulation 3 carry limitation periods, and a delay you cannot explain weakens an otherwise strong case. You can post the details on the MyVakeel forum for a practising advocate to review, or book a paid consultation with a Bar Council verified lawyer in this practice area.