SEBI will review the delisting framework to facilitate exits

India’s markets regulator will review its delisting framework in an effort to simplify capital market processes, its chairman said at a summit on Friday.

Chairman Tuhin Kanta Pandey said “Fair entry and fair exit are essential to a well-developed capital market.”

* The Securities and Exchange Board of India (SEBI) has introduced a series of reforms over the past few years to make the country’s capital markets more efficient and attractive to investors, including faster trade settlement and streamlined registration for foreign investors.

* In 2024, the regulator allowed companies to delist through the fixed-price route, where shareholders are offered a pre-set exit price. The mechanism works as an alternative to the reverse book-building process, which determines the exit price through the bids of investors.

* The regulator last year also approved a voluntary delisting framework for public sector companies where shareholders owned more than 90%.

*Sebi will also work with other regulators to simplify customer rules for non-resident Indians, Pandey said.

* Also, the watchdog is reviewing the Innovators Growth Platform (IGP) rules for startups to help companies better access markets for long-term capital.

* The platform was introduced in 2016 as an institutional trading platform to help startups raise funds and list on stock exchanges, but strict eligibility and lock-in rules have limited interest.

* It was revived as IGP in 2018, with further relaxations in 2019 and 2021 to encourage listings.