Listing & Delisting of Companies

Listing of Companies denotes permission granted by a stock exchange, to a company, for trading of its particular securities (e.g. equity shares, debentures etc.) on the stock exchange. Delisting of Companies refers to the removal of a company’s shares from listing on the stock exchanges, either voluntarily or involuntarily. Delisting of securities represents the removal of that particular security for dealing on the stock exchange. As a consequence of delisting of companies, the delisted securities can no longer be traded at that stock exchange. Delisting can be carried out in two ways:

  • Voluntary Delisting
  • Compulsory Delisting

In voluntary delisting, the company or its promoters or any other persons other than stock exchange can choose to remove its securities from the stock exchange. SEBI Guidelines has prescribed its mode, procedure & manner to be adopted by the company. The final exit price is to be paid to the shareholder, which is decided through reverse book building method.

Compulsory delisting can be initiated by the stock exchanges by the companies with terms of Listing Agreement only for default whereby the trading has been suspended for more than six months or as per the norms laid down in the SEBI Guidelines.

Delisting may also result as a consequence of Amalgamation, demerger merger, or Winding up of the Company.


Rights of Investors:

Voluntary Delisting:

It is obligatory for the promoter(s) of a Company who desires to delist from the exchange to offer an exit price to the shareholders before delisting of securities. Such price is to be determined through the ‘reverse book building’ procedure.

Compulsory Delisting:

Where the securities of the company are delisted by an exchange, the promoters of the company are legally responsible to compensate the security-holders of the company by paying them the fair value of the securities held by them and acquiring their securities, subject to their option to remain security holder with the Company. The fair value is to be determined by the arbitrator.

The point of using Lorem Ipsum is that it has a more-or-less normal distribution of letters, as opposed to using 'Content here, content here', making it look like readable English. Many desktop publishing packages and web page editors now use Lorem Ipsum as their default model text, and a search for 'lorem ipsum' will uncover many web sites still in their infancy. Various versions have evolved over the years, sometimes by accident, sometimes on purpose (injected humour and the like). Contrary to popular belief, Lorem Ipsum is not simply random text. It has roots in a piece of classical Latin literature from 45 BC, making it over 2000 years old. Richard McClintock, a Latin professor at Hampden-Sydney College in Virginia, looked up one of the more obscure Latin words, consectetur, from a Lorem Ipsum passage, and going through the cites of the word in classical literature, discovered the undoubtable source. Lorem Ipsum comes from sections 1.10.32 and 1.10.33 of "de Finibus Bonorum et Malorum" (The Extremes of Good and Evil) by Cicero, written in 45 BC. This book is a treatise on the theory of ethics, very popular during the Renaissance. The first line of Lorem Ipsum, "Lorem ipsum dolor sit amet..", comes from a line in section 1.10.32.