• IND SEBI proposed separate carve out for voluntary delisting of public sector undertakings (PSUs) under SEBI (Delisting of equity shares) regulations, 2021.
• Applies to PSUs where the promoter group holds 90% or more of the issued shares.

Background

• Under current regulations, delisting is successful if promoter and public shareholders' shareholdings reach 90%, with a floor price based on financial parameters.
• Government backing inflates PSU market prices, which could increase delisting cost.

Proposals

• PSUs with promoter/promoter group shareholding of 90% / more are eligible for carve out; eligible PSUs may delist without adhering to minimum public shareholding< norms.
• Delisting process can be executed at fixed price with mandatory 15% premium over floor price, irrespective of whether the shares are frequently or infrequently traded.
• If promoter shareholding is 90% or more, the two-thirds public shareholder approval requirement is waived, pending Securities contracts (regulation) rules amendments.
• Unutilized amount in escrow account will be transferred to designated stock exchange, held for seven years, subsequently moved to the Investor Education and Protection Fund (IEPF) or SEBI’s Investor Protection and Education Fund (IPEF) if unclaimed.

Effectiveness

• Comment period of the public consultation ends on 27May 2025.