Scroll Top
Introduction
Delisting can occur either by a company's voluntary decision or by the regulatory authority's (Securities and Exchange Board of India) decision to delist the company for violation of regulations.
Understanding Delisting
In order to list securities on the stock exchange, there are certain guidelines laid out by the market regulator, i. e. SEBI that a company is required to follow. Failure to comply with the norms can result in the company's securities being delisted from the stock exchange.
Delisting can be broadly classified into two types:1. Voluntary delisting 2. Compulsory delisting
What You Must Know
As per Rule 21A of the Securities Contract Regulation Act and the Securities Contract (Regulation) Rules, 1957, a company's securities will be mandatorily delisted if:
The company's director has been convicted for non-compliance with the rules and regulations of the Depositories Act and SEBI Act. Also, the company should have incurred a loss of Rs.1 crore or more.
The company's shares are being traded irregularly for the previous three years.
The company's trading activities have been halted for more than six months.
The company has been experiencing losses for three straight years, and the company's liabilities are exceeding its assets and the stakeholders' equity combined.
Voluntary delisting occurs when the listed company decides to delist its securities from the stock exchange. The reason for such an action can be the below-par performances of the securities on the exchange or a merger/acquisition of the listed company with another.
In case a company wishes to get delisted from a stock exchange, the entity will be required to follow a set of guidelines. That is, the company will have to obtain the shareholders' approval prior to being delisted post, which they will be offered an exit option.
Popular Topics
Latest Articles
CONTENTS
- Introduction
- Understanding Delisting
- What You Must Know
Products
Individuals
ClearServices
Resources & Guides
GST Resources
ITR Resources
Mutual Fund Resources
Tools
TRENDING MUTUAL FUNDS
ICICI Prudential Technology Fund Direct Plan Growth
Tata Digital India Fund Direct Growth
Axis Bluechip Fund Growth
ICICI Prudential Technology Fund Growth
Aditya Birla Sun Life Tax Relief 96 Growth
Aditya Birla Sun Life Digital India Fund Direct Plan Growth
Quant Tax Plan Growth Option Direct Plan
SBI Technology Opportunities Fund Direct Growth
Axis Long Term Equity Fund Growth
TOP AMCS
STOCK MARKETS
Clear offers taxation & financial solutions to individuals, businesses, organizations & chartered accountants in India. Clear serves 1.5+ Million happy customers, 20000+ CAs & tax experts & 10000+ businesses across India.
Efiling Income Tax Returns(ITR) is made easy with Clear platform. Just upload your form 16, claim your deductions and get your acknowledgment number online. You can efile income tax return on your income from salary, house property, capital gains, business & profession and income from other sources. Further you can also file TDS returns, generate Form-16, use our Tax Calculator software, claim HRA, check refund status and generate rent receipts for Income Tax Filing.
CAs, experts and businesses can get GST ready with Clear GST software & certification course. Our GST Software helps CAs, tax experts & business to manage returns & invoices in an easy manner. Our Goods & Services Tax course includes tutorial videos, guides and expert assistance to help you in mastering Goods and Services Tax. Clear can also help you in getting your business registered for Goods & Services Tax Law.
Save taxes with Clear by investing in tax saving mutual funds (ELSS) online. Our experts suggest the best funds and you can get high returns by investing directly or through SIP. Download Black by ClearTax App to file returns from your mobile phone.
Cleartax is a product by Defmacro Software Pvt. Ltd.
Company PolicyTerms of use
ISO 27001
Data Center
SSL Certified Site
128-bit encryption