Brief Overview:
Securities and Exchange Board of India (“SEBI”) has introduced the mechanism for voluntary delisting of non-convertible debt securities (“NCDs”) and non-convertible redeemable preference shares (“NCRPS”).
Technical Details:
The summary of the process for delisting prescribed by SEBI is as follows:
1) Passing of board resolution to the effect of proposed delisting;
2) Seeking in-principle approval of proposed delisting within 15 working days from the date of board resolution from the relevant stock exchange;
3) Disclosures in relation to the objects, cut-off date, etc. to be made to the stock exchanges and on the issuer’s website pertaining to delisting of the NCDs or NCRPS within 2 working days of receipt of in-principle approval;
4) Provide notice of delisting to holders of NCDs or NCRPS within 3 working days of receipt of in-principle approval;
5) Procuring consent from all holders of NCDs or NCRPS within 15 working days of the notice along with a no-objection letter from the Debenture Trustee;
6) Application for final delisting within 5 working days from receipt of all necessary approvals and letters. The stock exchange shall dispose the application within 15 working days from receipt of the application; and
7) This delisting mechanism shall be applicable to all listed NCDs and NCRPS except:
(a) Publicly issued NCDs and NCRPs listed on the stock exchange,
(b) Such NCDs and NCRPs having more than 200 holders (excluding QIBs), and
(c) The NCDs or NCRPS have been delisted by the stock exchange due to any penalty / redemption or as per regulations of the insolvency code.
The above amendments have been introduced by way of an amendment to the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, to incorporate a new chapter on the voluntary delisting of NCDs or NCRPS.
For further details, please see:
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● Ms. Apurva Kanvinde (apurva.kanvinde@jclex.com)
● Mr. Smit Parekh (smit.parekh@jclex.com)
● Mr. Mannan Gala (mannan.gala@jclex.com)
