PSU delisting norms: Sebi notifies easier rules for companies with 90% govt holding

Such measures include relaxations from the requirement of a two-thirds threshold for approving delisting by public shareholders and in the mode of computation of the floor price. Also, such delisting can happen at a fixed price—at least a 15% premium over the floor price—regardless of trading frequency.

In its notification dated September 1, the Securities and Exchange Board of India (SEBI) said the rule is applicable for PSUs—excluding banks, Non-banking Financial Companies (NBFCs) and insurance companies—where the state owns 90% or more stake.

The floor price for delisting will be calculated using the highest of three options—volume weighted average price paid during the 52 weeks immediately preceding the reference date; highest price paid during the 26 weeks immediately preceding the reference date; and the price determined by the joint valuation report obtained by two independent registered valuers.

Under the current earlier delisting rules, delisting is successful if promoter shareholding reaches 90%. Moreover, the floor price for delisting is calculated using several pricing metrics, such as the 60-day average price and the highest price in the last 26 weeks.

PSUs delisted under these special provisions undertaking voluntary strike-off which, if effected after the date of delisting but not later than 30 days from the expiry of the one-year period subsequent to delisting, then the amount which is due to the public shareholders who have not tendered their shares during the period of one year from the date of delisting would be transferred to an appropriate account of the designated stock exchange.

This would be held for a period of 7 years, during which time the investors can claim such an amount from the stock exchange.