What is the process for delisting a company from NSE/BSE?

Delisting refers to the removal of a company’s shares from the stock exchange, such as the National Stock Exchange (NSE) or Bombay Stock Exchange (BSE). A company might choose to delist for various reasons like mergers, acquisitions, or financial troubles. This process is regulated to ensure fairness and transparency for investors. Let’s look at the steps involved in delisting a company from the NSE/BSE.

1. Board Approval

The delisting process begins with the company's board of directors. The board must approve the delisting decision and ensure that shareholders are properly informed about the reasons and implications of delisting.

2. Shareholder Approval

Once the board approves delisting, the company needs approval from its shareholders. A special resolution must be passed at a general meeting, with the majority of shareholders voting in favor of delisting.

3. Notify the Stock Exchanges

The company then informs the NSE and BSE about the delisting decision. The company submits the necessary documents and resolutions to the exchanges for verification before proceeding with the delisting.

4. Public Announcement & Exit Option

A public announcement is made, explaining the delisting decision. The company offers an exit option to shareholders, where they can sell their shares at a specified price, typically through a reverse book-building process.

5. Submit Application to SEBI

After the reverse book-building process, the company submits a formal delisting application to SEBI (Securities and Exchange Board of India) for approval. SEBI reviews the process to ensure it meets all regulatory guidelines and safeguards shareholder interests.

6. Final Delisting

After SEBI’s approval, the stock exchanges proceed with the delisting. The company’s shares are removed from trading, and investors can no longer buy or sell shares on the exchange. The company must also meet post-delisting reporting requirements.