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 would like to understand which provision governs this, what it entitles me to, and how long I have before the remedy lapses. I also want to know whether I need a lawyer for this or can do it myself.

MyVakeel Legal Desk · Accepted Answer

In India, the answer to "What is the process for voluntary delisting of a listed company's shares under SEBI regulations?" turns on 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 points below set out the position and then what to do about it, in the order it should be done.

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.

Practical steps: 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 — remedies under SEBI Delisting of Equity Shares Regulations 2021, Regulation 3 carry limitation periods, and unexplained delay 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 corporate law.