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CS Executive · Capital Market and Securities Laws · Delisting of Equity Shares

Under SEBI's delisting framework, a promoter wants to voluntarily delist Meera Engineering Ltd. Which statement correctly captures a feature of the framework for such a delisting?

Voluntary delisting requires an exit price discovered through a process rather than one fixed by the promoter alone, and public shareholders must be given an opportunity to tender their shares. This protects minority holders from being forced out at an arbitrary price or without a say.

  1. APublic shareholders can be forced to sell at the book value fixed by the promoter alone
  2. BDelisting is possible only after a discovered exit price is arrived at through a process, and public shareholders are given an opportunity to tender sharesCorrect
  3. CDelisting needs no shareholder approval because the exchange decides it alone
  4. DThe shares of public shareholders are automatically cancelled on the delisting date

Explanation

The framework protects public shareholders: an exit price is discovered through a process (book-building), not set unilaterally, and public shareholders may tender their shares. Promoter-fixed book value, no approval and automatic cancellation are not features of the framework.

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