Reverse Book Building Process

SEBI has released the Discussion Paper on Delisting of Equity Shares Review of “Reverse Book Building Process". SEBI came out with SEBI (Delisting of Equity Shares) Amendments Regulations, 2015, thereby amending Delisting Regulations, 2009. Currently, in voluntary delisting an issuer/promoter has to first take the approval of shareholders of that class, then an in-principal approval of the stock exchange followed by RBB Process to discover the price. Delisting is regarded as successful if promoter shareholding reaches 90% pursuant to RBB at the discovered price which is acceptable to the promoter. Several concerns have been raised by the stakeholders regarding implementation of the reverse book building process. Currently, if the price discovered through RBB is not attractive to the promoter, he may unilaterally reject the price and the whole exercise becomes futile. Instead, the promoter may be allowed to make counter offer to the shareholders of that class. Further, it is also suggested that in case promoter(s) give a counter offer, then the counter offer price should not be less than the book value and the counter offer should be accepted by such number of public shareholders where the promoter shareholding reaches 90%. comments may please be e-mailed or sent by post latest by August 16, 2018.