Description

SEBI introduces special provisions for delisting equity shares of Public Sector Undertakings (PSUs) excluding banks, NBFCs, and insurance companies.

Summary

SEBI has amended the Delisting of Equity Shares Regulations, 2021 to introduce special provisions for delisting equity shares of Public Sector Undertakings (PSUs). The amendment adds a new Part-F to Chapter VI, establishing a simplified framework for PSU delisting while excluding banks, NBFCs, and insurance companies from these provisions.

Key Points

  • New regulations apply to PSU equity share delisting (excluding banks, NBFCs, insurance companies)
  • PSU shares can be delisted from all recognized stock exchanges where they are listed
  • Acquirer and other PSUs must hold 90% or more of the issued shares of that class
  • Shareholders’ approval required through special resolution via postal ballot or e-voting
  • Fixed price process to be followed for delisting
  • Minimum floor price requirements established

Regulatory Changes

  • Addition of Part-F “Special Provisions for Delisting of Public Sector Undertakings (PSUs)” under Chapter VI
  • Introduction of Regulation 38B governing PSU delisting procedures
  • Establishment of specific conditions for PSU delisting including shareholding thresholds and approval mechanisms
  • Implementation of floor price methodology for PSU delisting transactions

Compliance Requirements

  • PSUs seeking delisting must ensure acquirer and other PSUs hold minimum 90% shareholding
  • Mandatory shareholder approval through special resolution via postal ballot or e-voting
  • Explanatory statement in notice must disclose all material facts related to delisting
  • Compliance with fixed price process for delisting
  • Adherence to minimum floor price requirements based on volume weighted average price or maximum price criteria

Important Dates

  • Effective Date: Date of publication in Official Gazette (September 2, 2025)
  • Applicability: Provisions apply to delisting offers where initial public announcement for delisting has not been made

Impact Assessment

This amendment significantly streamlines the delisting process for PSUs, potentially facilitating government disinvestment programs and corporate restructuring initiatives. The relaxed framework compared to private company delisting may accelerate PSU delisting activities and provide greater flexibility for government entities in managing their listed subsidiaries.

Impact Justification

Major regulatory amendment introducing special delisting framework for PSUs with significant structural changes to existing delisting process