Daijiworld Media Network – New Delhi

New Delhi, Jun 18: In a major regulatory shift to aid the government’s disinvestment strategy, the Securities and Exchange Board of India (SEBI) has approved key changes to its Delisting of Equity Shares Regulations, 2021, introducing special provisions for Public Sector Undertakings (PSUs) where the Government or other PSUs hold 90% or more equity.

The changes will simplify voluntary delisting of such PSUs by allowing them to bypass the reverse book-building process and instead exit the markets via a fixed price mechanism. Under the new norms, the offer price must be at least 15% above the floor price, which will be determined by registered valuers rather than relying on market-based pricing, often skewed due to thin trading volumes.

“This applies to PSUs with 90% or more government holding—most of them were historically listed with minimal public float and now require a clearer exit path,” said SEBI Chairman Tuhin Kanta Pandey.

A major procedural hurdle—the requirement of approval from two-thirds of public shareholders—has also been waived for such PSUs, recognizing the challenges posed by extremely low public shareholding in these companies.

According to SEBI, the reforms are targeted and specific, impacting only five PSUs that currently meet the 90% threshold. These include companies with negligible public float, often legacy listings from previous decades.

SEBI clarified that post-delisting, PSUs will have the flexibility to continue as unlisted entities, opt for voluntary strike-off, or proceed toward winding up. In cases where a PSU opts for strike-off, it must initiate the process within 30 days after a year from the delisting date.

The move is being seen as a boost to the Centre’s strategic disinvestment drive, enabling smoother exits for legacy public sector firms while reducing regulatory friction.