New Delhi: The Securities and Exchange Board of India (SEBI) has approved changes to the delisting norms for Public Sector Undertakings (PSUs) with more than 90 per cent government or PSU shareholding.
The changes introduce a fixed price exit route, removing several procedural hurdles that earlier slowed down the voluntary delisting process for legacy-listed state-run companies.
Special Provisions for High Government-Shareholding PSUs
The revised norms, cleared at a recent SEBI board meeting, apply specifically to PSUs where the central government and/or other PSUs together hold at least 90 per cent equity. These provisions are designed to help such companies, typically with minimal public float and thin trading volumes, exit the market more efficiently.
“These changes have gone through consultation papers and board committees before being approved,” SEBI Chairman Tuhin Kanta Pandey said during a briefing. He clarified that the provisions do not apply to PSUs in the banking, financial services and insurance (BFSI) sector.
Fixed Price Delisting with Valuation-Based Floor
Under the new rules, eligible PSUs can delist via a fixed price mechanism rather than the existing reverse book-building method. The offer price must be at least 15 per cent above the floor price, which will now be calculated by registered valuers rather than based on market data, an important shift given the often-illiquid nature of these stocks.
The regulator has also removed the mandatory requirement for approval from two-thirds of public shareholders. This clause, seen as a major bottleneck in earlier delisting attempts, is being waived due to the extremely low public shareholding in these firms.
