Aug 14 (Reuters) – India’s market regulator mentioned on Monday firms may provide their shareholders fastened costs for the shares being delisted, proposing an alternate mechanism to delist from inventory exchanges.

The Securities and Exchange Board of India (SEBI) floated this concept in a session paper launched on its web site. Such a paper is step one in the direction of a change in insurance policies.

Currently delisting is carried out by way of reverse book-building, by which shareholders place presents for the worth at which they might promote securities again to giant shareholders, who can affect firm coverage.

The regulator additionally urged a framework for firms whose shares are held by investment-holding companies.

If the worth arrived after the reverse guide constructing was not acceptable to shareholders, they will make a counter if the presents obtained are extra 50% of the general public shareholding or if they’re larger than the distinction between the stake of enormous shareholders and 75% whole issued shares, SEBI mentioned.

“Once such counter-offer is made, public shareholders will be given an opportunity to tender their shares,” it mentioned

The bidding might be open for 5 days and the truthful market worth of an organization’s property must be thought of whereas fixing the ground worth, the regulator mentioned. Floor worth is the minimal worth at which buyers can place bids or presents their shares.

SEBI mentioned the fastened worth for delisting can’t be lower than the ground worth.

Reporting by Jayshree P Upadhyay; Editing by Janane Venkatraman and Arun Koyyur

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