1. New delisting norms to help clean up bourses
Published: June 15,2009
New Delhi, June 15 With the new delisting rules providing higher discretionary power to the
country stock exchanges, the bourses can now clean up its system by delisting inactive
companies and freeing resources.
"It will empower the stock exchanges to free resources and infrastructure from inoperative
companies,"SMC Capital equity head Jagannadham Thunuguntla said, adding only one-
third of companies on the BSE are actively traded.
According to Thunuguntla, one of the significant changes in the new delisting norms is that in
case of mandatory delisting the company will be able to buy the outstanding shares from willing
sharehlders at a fair price, which would be determined as per regulation set by market watchdog
Sebi.
"As delisting demand would come from exchanges, the current procedure of reverse book
building will not be used to determine the price of the shares to be bought from willing
shareholders. SEBI might come up with a formula,"he said.
Also, now companies would be able to file for delisting using its resources. Earlier, only
individuals such as promoters and directors were eligible to file for delisting using personal
resources.