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The Securities and Exchange Board of India Act, 1992 (15 of 1992);

The Securities and Exchange Board of India established under section 3 of the Act;

“Bidding period”
Bidding period shall be period in which bidding is to be accepted by the shareholders.

A company within the meaning of section 3 of the Companies Act, 1956 (1 of 1956) and includes a body corporate or corporation established under a central Act, state Act or provincial Act for the time being in force, whose equity shares are listed on a recognized stock exchange;

“Compulsory delisting”
Delisting of equity shares of a company by a recognized stock exchange under Chapter V of these regulations;

The right to appoint directly or indirectly or by virtue of agreements or in any other manner majority of directors on the Board of the target company or to control management or policy decisions affecting the target company.

“Custodian” is appointed for

  • safekeeping of physical securities or
  • For participating in any clearing system, through approved depository companies, in case of dematerialized securities.

“Escrow account”
The special purpose account in which total estimated amount of consideration is deposited.

“Exit price"
Exit Price shall be the final price at which the shareholders will tender the shares.

“Floor price”
Floor Price is the minimum price at which the biddings shall be accepted and to be mentioned in the bidding form and should be determined on the basis of regulation 15 of SEBI (delisting of equity shares) regulations, 2009.

“Final price”
The price determined by way of bidding, and that is to be paid to the shareholders who tender their shares.

“Merchant banker”
Any person who is engaged in the business of issue management either by making arrangement regarding selling, buying or subscribing to securities or acting as manager, consultant, adviser or rendering corporate advisory service in relation to such issue management.

“In-principle approval”
An approval by the stock exchange to the company for initiating the process of delisting for giving an exit opportunity to the public shareholders.

“Independent valuer”
'Valuer' means a chartered accountant within the meaning of clause (b) of section 2 of the Chartered Accountants Act, 1949 (38 of 1949), who has undergone peer review as specified by the Institute of Chartered Accountants of India constituted under that Act, or a merchant banker appointed to determine the value of the delisted equity shares;

“Letter of offer”
A letter of offer is a document addressed to the shareholders holding equity shares containing floor price, offer price, dates of opening and closure of offer etc.

“Person acting in concert"
Individual(s) /company(ies)/ any other legal entity(ies) who are acting together for a common objective or for a purpose of substantial acquisition of shares or voting rights or gaining control over the target company pursuant to an agreement or understanding whether formal or informal.

“Preferential allotment "
An issue of shares on preferential basis and/or through private placement made by a company in pursuance of a resolution passed under sub- section (1A) of section 81 of the Companies Act, 1956 and issue of shares to the promoters and their relatives either in public issue or otherwise.

(a) Any person who is in control of the target company;
(b) Any person named as promoter in any offer document of the target company or any shareholding pattern filed by the target company with the stock exchanges pursuant to the Listing Agreement, whichever is later;

And includes any person belonging to the promoter group as mentioned in Explanation I:

Provided that a director or officer of the target company or any other person shall not be a promoter, if he is acting as such merely in his professional capacity.

Explanation I: For the purpose of this clause, 'promoter group' shall include:

(a) in case promoter is a body corporate –
(i) a subsidiary or holding company of that body corporate;
(ii) any company in which the promoter holds 10% or more of the equity capital or which holds 10% or more of the equity capital of the promoter;
(iii) any company in which a group of individuals or companies or combinations thereof who holds 20% or more of the equity capital in that company also holds 20% or more of the equity capital of the target company; and
(b) in case the promoter is an individual –
(i) The spouse of that person, or any parent, brother, sister or child of that person or of his spouse;
(ii) any company in which 10% or more of the share capital is held by the promoter or an immediate relative of the promoter or a firm or HUF in which the promoter or any one or more of his immediate relative is a member;
(iii) any company in which a company specified in (i) above, holds 10% or more, of the share capital; and
(iv) any HUF or firm in which the aggregate share of the promoter and his immediate relatives is equal to or more than 10% of the total.

Explanation II: Financial Institutions, Scheduled Banks, Foreign Institutional Investors (FIIs) and Mutual Funds shall not be deemed to be a promoter or promoter group merely by virtue of their shareholding. Provided that the Financial Institutions, Scheduled Banks and Foreign Institutional Investors (FIIs) shall be treated as promoters or promoter group for the subsidiaries or companies Promoted by them or mutual funds sponsored by them.”

“Public shareholders”
The holders of equity shares, other than the following:
(a) promoters;
(b) holders of depository receipts issued overseas against equity shares held with a custodian and such custodian;

“Recognized stock exchange”
Any stock exchange which has been granted recognition under section 4 of the Securities Contracts (Regulation) Act, 1956;

“Recognized stock exchange having nation wide trading terminals”
The Bombay Stock Exchange Limited, the National Stock Exchange of India Limited or any other recognized stock exchange which may be specified by the Board in this regard.

Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009

A Schedule appended to these regulations;

“A Small company”
For the purposes of these Regulations, small company shall mean:
1. a company which has paid up capital upto one Crore rupees and its equity shares were not traded in any recognized stock exchange in the one year immediately preceding the date of decision.
2. a company which has three hundred or fewer public shareholders and where the paid up value of the shares held by such public shareholders in such company is not more than one crore rupees

“Specified date”
Specified date shall be the date on which the name of the shareholders, to whom letters of offer have to be sent, shall be determined.

“Voluntary delisting”
Delisting of equity shares of company voluntarily on application of the company under Chapter III of these regulations;

“Working days”
The working days of the Board.

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