Corporate Professionals Capital (P) Ltd.

D-28, South Extn., Part-I, New Delhi-110049

Contact Person: Anjali Aggarwal, VP
Contact No.: +919971673336

EXIT PROCEDURE
FOR RSE LISTED
COMPANIES

Mail id: anjali@indiacp.com

A BRIEF NOTE ON EXIT PROCEDURE FOR

RSE LISTED COMPANIES
SEBI, has vide its various Circulars, mandated for derecognition of various
Regional Stock Exchanges (RSEs) and has been emphasizing on the status of
the companies exclusively listed on such Exchanges. As a result, as on date,
most of the RSEs have been either been derecognized or are on the verge of
being derecognized.
SEBI, has vide its latest Circular dated 17th April 2015 has mandated for
following 2 options for the RSE listed such companies:
Either to provide liquidity to their shareholders, by obtain listing at
Nationwide Trading Terminals; or
To provide an exit to their public shares.

Companies, that fail to do either of

the above, their Promoters and
Directors would be under strict
scrutiny from SEBI, whenever they
approach

SEBI

next,

for

any

approvals/ registrations.
Companies that decide to go in for Direct Listing, their road map is quite clear.
They have to comply with the other Exchanges Direct Listing norms and
accordingly apply.

On the contrary, for providing exit to the shareholders, the procedure is not
crystal clear.

As per our analysis, for giving the Exit and removing that
taboo from their names, the Promoters would have to follow
the Delisting Regulations.
For any company falling within the ambit of a Small Company, the
broad procedure would be as follows:
1. Convening a Board Meeting & appointment of a Merchant Banker;
2. Shareholders approval through Postal Ballot;
3. In Principle Application to the RSE;
4. Write to individual shareholders seeking their assent/ dissent to the
delisting and confirming if they intend to tender their shares;
5. Under the Small Companies delisting route, Promoters need to obtain
the written consent of atleast 90% of the public shareholders.
For the companies not falling within the amit of Small Company, will
have to follow the Reverse Book Building (RBB) process. Under the RBB
process, the broad procedure would be as follows:
1) Convening a Board Meeting & appointment of a Merchant Banker;
2) Shareholders approval through Postal Ballot;
3) In Principle Application to the RSE;
4) Take RBB platform from BSE/ NSE and give exit opportunity to all the
shareholders;
5) Under the RBB process, a delisting offer is deemed successful, if post
delisting offer, the Promoters holding crosses 90% threshold.

Further, as per the amended SEBI Delisting Regulations, now there is a

provision

of seeking exemption from SEBI

from strict

enforcement of the Regulations. So, in a situation, the Company, for

proper and valid reasons, intends to approach SEBI for an exemption,
that alternative is also available.

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Disclaimer:
This is our Analysis of the provisions & Circulars. We expressly disclaim any kind of liability, which may arise due to any
decision taken by the company or management or any other person or persons, on the basis of this Report.