Securities and Exchange Board of India has issued the SEBI (Delisting of Equity Shares) Regulations 2009 for voluntary delisting of equity shares from stock exchanges which provide the overall framework for voluntary delisting by a promoter or acquirer through a process referred to as Reverse Book Building.

The promoter or acquirer shall appoint a Merchant Banker and also a trading member for placing bids on the online electronic system. The Merchant Banker and promoter shall make a public announcement and also dispatch a letter of offer to the public shareholders along with a bidding form. Shareholders may approach the trading member for placing offers on the on-line electronic system with the bidding form. The shareholders desirous of availing the exit opportunities are required to tender their shares to the trading members prior to placement of orders. Alternately, they may mark a pledge for the shares.

The final offer price shall be determined as the price at which the maximum number of shares has been offered. The promoter shall have the choice to accept / not accept the price. If the price is accepted, the promoter shall be required to accept all valid offers upto and including the final price. However, if the quantity eligible for acquiring securities at the final price offered does not result in promoter holding crossing the limits specified in the Regulations, the offer shall be deemed to have failed and the company shall remain listed.

At the end of the offer, the merchant banker to the book building exercise shall announce the final price and the acceptance (or not) of the price by the promoter. Any remaining public shareholders may tender shares to the promoter at the same final price upto a period of one year from the date of delisting.

Special provisions have been provided in case of voluntary delisting of small companies. Equity shares of such companies may be delisted without following the Reverse Book Building process and by following a separate procedure specified in the Regulations.