Markets regulator Sebi on Tuesday proposed carving out a separate mechanism for voluntary delisting of PSUs, where the government or promoter group owns 90 per cent or more of shares.
Under current rules, delisting is successful if promoter shareholding reaches 90 per cent. Moreover, the floor price for delisting is calculated using several pricing metrics such as 60-day average price and highest price in the last 26 weeks.
These rules can make delisting costly for PSUs due to high market prices despite low book values or weak financials.
In its consultation paper, Sebi noted that many PSUs have low public shareholding, outdated business models or weak future outlook and higher market prices due to government ownership than actual value. These make them financially burdensome for the government to delist such companies.
In view of these drawbacks and to facilitate delisting of such PSUs, Sebi has proposed that a separate carve out for voluntary delisting should be created.
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