Delisting

The removal of a company's shares from the exchange, either voluntarily by the promoter buying out the public holders, or compulsorily by the regulator.

Voluntary delisting runs by default through reverse book building, where the exit price is discovered from shareholder bids rather than set by the acquirer, and the attempt succeeds only if enough shares are tendered to take the acquirer's holding to 90% of the company. Since SEBI's second amendment to the delisting regulations, which applies to delistings announced on or after 25 September 2024, an acquirer in a frequently traded share may instead offer a fixed price, provided it's at least 15% above the floor price the pricing formula produces. So if the floor is ₹200, the fixed-price offer can't be lower than ₹230. On the fixed-price route there's no counter-offer stage, so the number on the table is the number: holders take it or the delisting fails.

For a minority holder the situation is unusual, because the normal exit disappears if the delisting succeeds and the holder didn't tender. Holding an unlisted share of a company controlled by someone who wanted you gone is a poor position.

Under reverse book building the floor price is rarely the final one, because holders bid above it; under the fixed-price route it is.