Delisted stocks list
Corporate Actions - Delisted
GFind all the information you need about listed companies' corporate actions.
| Company Name | Company Code | From Date |
|---|
What is the Delisting of shares?
The delisting occurs when a company’s shares are removed from the stock exchanges, i.e., NSE and BSE in India and would no longer be publicly traded. This can be voluntarily or compulsorily, depending on the circumstances.
Why do Companies Delist shares?
Companies may delist their shares for various reasons, such as mergers and acquisitions, non-compliance with listing requirements, financial distress, and strategic reasons:
Mergers and Acquisitions:
A common reason for delisting shares is the merger or acquisition of a company. In this scenario, the stock exchange may delist the shares of the acquired company, and shareholders may receive shares / cash in exchange for shares.
Non-Compliance with Listing requirements:
Companies which fail to adhere to listing requirements may face stock delisting. Listing demands differ depending on the stock exchange, but they typically include reporting of financials, annual reports, minimum market capitalisation, etc.
Financial Distress:
Companies facing financial difficulties or on the verge of bankruptcy may delist their shares to avoid scrutiny from investors and regulators. Stock delisting can also give companies more flexibility in refinancing or restructuring their debt.
Strategic Reasons:
Companies may delist their shares for multiple reasons, such as going private or focusing on long-term goals without external pressure to meet short-term financial goals.
Compulsory Vs Voluntary Delisting
| Particulars | Compulsory Delisting | Voluntary Delisting |
|---|---|---|
| Meaning | When companies are forced to delist the shares and are no longer publicly traded. | A company’s own decision to go private, i.e., delist its shares. |
| Reasons | Non-compliance with exchange listing requirements. | Merger and Acquisition or management’s decision to go private. |
| Cool-off period to re-list the shares | 10 years | 5 years |
What happens to shares which get Delisted?
Shareholders receive an official letter and a bidding form from the company, with the option to reject the acquirer’s offer. Successful delisting requires the purchaser to buy back the necessary shares within a specified period. Failure leads to selling on the OTC (over-the-counter) market, a time-consuming process due to decreased liquidity. Shareholders profit by selling delisted stock to promoters during the buyback window, but prices may decline after it closes.
In compulsory delisting, an independent evaluator determines the buyback cost. Unlike voluntary delisting, ownership remains unaffected, but delisted stocks may lose value.
Effects of Delisting on Shareholders
Shares become illiquid after they get delisted, which means they cannot be traded on the exchange anymore. This reduces the ability of shareholders to sell their shares easily.
Delisting of securities can also cause a decline in the stock price due to reduced demand for shares.
After delisting of securities, shareholders may have very limited access to the company’s information, making it difficult to evaluate the value of their shares. Further, there will be no obligation for the company to held an Annual General Meeting every year.
Shareholders have many options when a company delists its shares. These include selling or holding their shares, participating in a tender offer, or a reverse merger.
