Sebi to introduce special measures to facilitate voluntary delisting of certain PSUs
Markets regulator Sebi on Wednesday decided to introduce special measures to facilitate voluntary delisting of public sector undertakings, where the government owns 90% or more of shares.
Among the measures include relaxations from requirement of two-third threshold for approving delisting by public shareholders and in the mode of computation of floor price.
Under current rules, delisting is successful if promoter shareholding reaches 90%. Moreover, the floor price for delisting is calculated using several pricing metrics such as 60-day average price and highest price in the last 26 weeks.
These rules can make delisting costly for PSUs due to high market prices despite low book values or weak financials.
"In certain Public Sector Undertakings (PSUs) with minimal public float, the shares are traded frequently at prices which are not commensurate with operations, net worth, profitability and other financial parameters of the company. If such PSUs are to undertake delisting, the current norm of 60 days' volume weighted average market price makes it financially burdensome to delist such companies," Sebi said after the conclusion of its board meeting.
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In view of these drawbacks and to facilitate delisting of such PSUs, the board approved amendment to Sebi (Delisting of Equity Shares) norms for introduction of a special measures for PSUs (other than banks, non-banking financial companies (NBFCs) and insurance companies). Those under the ambit of any financial sector regulator are to undertake voluntary delisting through fixed price delisting process when the shareholding of the Government of India as a promoter equals or exceeds 90 per cent.
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Further, these PSUs can delist without meeting minimum public shareholding norms. Moreover, delisting can happen at a fixed price -- at least 15 per cent premium over the floor price -- regardless of trading frequency.
The regulator decided to abolish the requirement for two-thirds public shareholder approval in cases where the promoter plus PSU holding is already 90 per cent.
Regarding handling unclaimed money, Sebi said that such money should be transferred to the stock exchange for 7 years and then moved to the Investor Education and Protection Fund (IEPF) or the regulator's IPEF. Further, investors can claim the amount during this period.
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