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Capital Market and Securities Laws · Delisting of Equity Shares

Relisting, Penalties and Enforcement after Delisting

Updated 11 October 2026 · Fact-checked

Relisting means getting delisted shares listed again, and it is barred for a cooling-off period after delisting. Section 15H of the SEBI Act penalises failure to disclose holdings or make an open offer, with a minimum of ₹10 lakh. Section 12A bans manipulative practices. In answers, state the provision, apply the facts, then conclude.

Understand Relisting, Penalties and Enforcement

When a company's equity shares are delisted, they stop trading on the stock exchange. The law does not let the company jump back on the exchange at will. A cooling-off period applies before the shares can be listed again. This protects investors from companies that exit and re-enter the market to suit themselves.

Under the SEBI delisting framework, the usual rule is: shares delisted voluntarily cannot be relisted for five years from the date of delisting, and shares delisted compulsorily cannot be relisted for ten years. Relisting is then done through a fresh public issue under the SEBI issue rules. Check the current regulation text in your ICSI material for exact conditions and exceptions.

The second theme is penalty. Section 15H of the SEBI Act, 1992 applies to a person who fails to disclose his aggregate shareholding before acquiring shares, fails to make a public announcement to acquire shares at a minimum price, fails to make a public offer by sending a letter of offer to shareholders, or fails to pay the consideration to shareholders who sold under the offer. The penalty is not less than ₹10 lakh, and may extend to ₹25 crore or three times the profits made from the failure, whichever is higher.

The third theme is enforcement. Section 12A says no person shall directly or indirectly use manipulative or deceptive devices, defraud, engage in insider trading, deal while in possession of material or non-public information, or acquire control or securities beyond the permitted percentage in breach of the regulations, in connection with securities listed or proposed to be listed. Section 15HA penalises fraudulent and unfair trade practices, and Section 23E of the SCRA, 1956 penalises a company that breaches listing or delisting conditions.

Finally, Section 21A of the SCRA lets an exchange delist securities after recording reasons, but only after giving the company a reasonable opportunity of being heard. A listed company or an aggrieved investor can appeal to the Securities Appellate Tribunal within fifteen days.

Key rules to remember

Relisting bar after voluntary delisting
Earliest relisting = date of delisting + 5 years
Relisting is through a fresh public issue as per the SEBI issue rules. Confirm the exact regulation text in your study material.
Relisting bar after compulsory delisting
Earliest relisting = date of delisting + 10 years
Compulsory delisting carries the longer bar.
Section 15H penalty
Minimum ₹10 lakh; maximum = higher of ₹25 crore and 3 × profits made from the failure
Covers failure to disclose holdings, make a public announcement, make a public offer, or pay consideration.
Section 15HA penalty
Minimum ₹5 lakh; maximum = higher of ₹25 crore and 3 × profits made from the practice
For fraudulent and unfair trade practices relating to securities.
Section 23E SCRA penalty
Minimum ₹5 lakh; maximum ₹25 crore
For breach of listing or delisting conditions. No profit-based limb.
Section 21A appeal
Appeal to SAT within 15 days; further period up to 1 month if sufficient cause
Delisting needs recorded reasons and a reasonable opportunity of being heard first.

How to solve Relisting, Penalties and Enforcement questions

Use the same structure for any question on relisting, penalties or enforcement. It matches the ICSI style of provision, analysis, conclusion.

  1. 1Identify what the question tests: relisting bar, a Section 15H default, a Section 12A prohibition, or an appeal against delisting.
  2. 2Write the provision in plain words and cite the Act and section, for example Section 15H of the SEBI Act, 1992.
  3. 3List the facts that matter: type of delisting, dates, who defaulted, and any profit made.
  4. 4Match each fact to a condition of the provision. For 15H, name which of the four defaults occurred.
  5. 5For a penalty, state the minimum, then compute the maximum as the higher of the fixed cap and three times the profit.
  6. 6For relisting, add the cooling-off period to the delisting date and compare with the proposed date.
  7. 7Close with a clear conclusion that answers the exact question asked.

Quickest way: Three-line answer drill

When to use it: Use this when a short-note or 5-mark question gives you little time.

  1. Line 1: name the section and what it prohibits or requires.
  2. Line 2: give the numbers, such as ₹10 lakh minimum, ₹25 crore or three times profit, and 5 or 10 years.
  3. Line 3: apply to the facts and conclude in one sentence.

Common mistakes in Relisting, Penalties and Enforcement

  • Mixing up the 5-year and 10-year relisting bars.

    Both look similar and students memorise only one number.

    Fix: Link 5 years to voluntary and 10 years to compulsory delisting. Compulsory is the stricter case, so the longer period.

  • Stating the Section 15H maximum as only ₹25 crore.

    Students forget the profit-based limb.

    Fix: Always write: higher of ₹25 crore or three times the profits made from the failure. Compute both.

  • Confusing the minimum penalty under 15H (₹10 lakh) with 15HA and 23E (₹5 lakh).

    The maximums look identical, so the sections blur.

    Fix: Remember that only 15H has a ₹10 lakh minimum. Revise the three sections side by side.

  • Applying the profit limb to Section 23E.

    Students assume all SEBI penalties have the three-times-profit rule.

    Fix: Section 23E has a range of ₹5 lakh to ₹25 crore only.

  • Forgetting the hearing and appeal rules in Section 21A.

    Students focus only on penalties.

    Fix: Note that delisting needs recorded reasons and a reasonable opportunity of being heard, and the appeal to SAT is within fifteen days.

  • Describing Section 12A as a penalty section.

    It is taught alongside penalty sections.

    Fix: Section 12A states the prohibitions. The penalties come from sections such as 15HA and 15H.

Worked examples

Example 1

Alpha Textiles Ltd was voluntarily delisted from all exchanges on 15 June 2022. Its board wants to relist the shares on 1 March 2027. Advise.

Show the solution
  1. Provision: after voluntary delisting, shares cannot be relisted for five years from the date of delisting, and relisting is through a fresh public issue as per SEBI issue rules.
  2. Facts: delisting date is 15 June 2022. Five years from that date ends on 15 June 2027.
  3. Application: the proposed date, 1 March 2027, falls before 15 June 2027, so the cooling-off period is not complete.

Answer: Alpha Textiles Ltd cannot relist on 1 March 2027. The earliest date is 15 June 2027, and then only through a fresh public issue.

Example 2

Rohan acquires shares of a listed company and fails to make the required public offer. He earned a profit of ₹10 crore from the failure. State the penalty range under the SEBI Act, 1992.

Show the solution
  1. Provision: Section 15H applies to a person who fails to make a public offer by sending a letter of offer to shareholders.
  2. Minimum penalty: ₹10 lakh.
  3. Maximum: higher of ₹25 crore and three times the profit.
  4. Three times the profit = 3 × ₹10 crore = ₹30 crore.
  5. ₹30 crore is higher than ₹25 crore, so the maximum is ₹30 crore.

Answer: Rohan is liable to a penalty of not less than ₹10 lakh and up to ₹30 crore under Section 15H.

Exam tips

  • Learn the penalty sections as a small table in your head: 15H minimum ₹10 lakh, 15HA and 23E minimum ₹5 lakh.
  • Always cite the Act and section before giving the rule. ICSI markers look for it.
  • In numerical penalty questions, show the three-times-profit calculation even if the fixed cap turns out higher.
  • For relisting questions, state whether the delisting was voluntary or compulsory before choosing 5 or 10 years.
  • Write a clear one-line conclusion at the end of every case-based answer.

Practice questions from Delisting of Equity Shares

Relisting, Penalties and Enforcement: frequently asked questions

Can a delisted company list its shares again?

Yes, but only after a cooling-off period and through a fresh public issue under the SEBI issue rules. The usual bar is five years after voluntary delisting and ten years after compulsory delisting. Check your study material for the exact conditions.

What is the penalty under Section 15H of the SEBI Act?

It is not less than ₹10 lakh. It may extend to ₹25 crore or three times the profits made from the failure, whichever is higher.

What does Section 12A of the SEBI Act prohibit?

It prohibits, directly or indirectly, manipulative and deceptive devices, schemes to defraud, fraudulent acts, insider trading, dealing on material or non-public information, and acquiring control or securities beyond the permitted level in breach of the regulations. These apply to securities listed or proposed to be listed.

Can a company challenge a delisting decision?

Yes. Under Section 21A of the SCRA, 1956, a listed company or an aggrieved investor can appeal to the Securities Appellate Tribunal within fifteen days of the decision. The Tribunal may allow a further period of up to one month for sufficient cause.