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Principal Associate in the General Corporate Practice at the Mumbai office of Cyril Amarchand Mangaldas. Arnav advises on in-bound and out-bound mergers & acquisitions of listed and unlisted companies. He can be reached at

Analysis of recently attempted Voluntary Delistings

The number of voluntarily delistings seen in the last 1 (one) year has surpassed the number of delistings attempted earlier in a single year. Promoters are choosing to voluntarily delist their companies from the stock exchanges for various reasons including stock market price not being reflective of true value of the company’s stock, having full control over operations (without being required to go for any public vote for critical transactions), restructuring of their group entities, greater flexibility and reducing costs related to numerous regulatory compliances.

Even the Securities and Exchange Board of India (SEBI) introduced various amendments (mostly for tightening of procedure) under the new SEBI (Delisting of Equity Shares) Regulations, 2021 (2021 Delisting Regulations). The 2021 Delisting Regulations replaced the old SEBI (Delisting of Equity Shares) Regulations, 2009 (2009 Delisting Regulations). However, the key elements of a delisting process i.e. requirement of super majority of minority shareholder being in favour of the delisting proposal and the bidding process through the reserve book build (RBB) mechanism remain the same even under the new 2021 Delisting Regulations.
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 Regulation 22(2A) of SEBI Takeover Regulations

A question that comes up regularly in the context of an underlying secondary transaction that triggers an open offer is whether such a transaction can be closed on the stock exchange? This is due to reservations expressed by the Securities Exchange Board of India (SEBI) in relation to the interpretation of certain provisions of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (Takeover Regulations).

This has led to unintended consequences, which cast a doubt on the legality of the on-market closure of underlying share purchase transactions. The shadow of this doubt unfortunately extends to on-market closures even if the on-market closure follows the completion of the open-offer process. In this blog post[1] we would like to clarify that the on-market closure of underlying transactions is not contrary to Takeover Regulations and the provisions of Takeover Regulations are not subject to multiple interpretations on this aspect.[2]
Continue Reading Regulation 22(2A) of SEBI Takeover Regulations : Is On-Market Closure of Underlying Transactions Prohibited?