Introduction

• Did you miss a crucial deadline for your delisting application? No need to worry! There are still a few ways to rectify the situation.
• This article will help you navigate the aftermath of missing a delisting application.
• It will also provide you with a lifeline to secure your financial future.

What is Delisting?

Let's start by understanding what the term 'delisting' means before diving into the details of missed delisting applications. Delisting refers to the removal of stock from a stock exchange. It can occur voluntarily when a company decides to remove its shares from trading. It can also occur involuntarily when an exchange forces the removal of a company's shares due to non-compliance with listing requirements or for other regulatory reasons.

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What Are the Various Types of Delisting?

Voluntary

This type of delisting occurs when a company willingly delists itself from the exchange for multiple reasons. For example, a company may seek to reduce administrative costs, eliminate reporting requirements, or transition to a different exchange or market.

Voluntary delisting is typically initiated through a formal application process and requires approval from the exchange and shareholders.

Forced or Involuntary

As the name suggests, this type of delisting is done forcefully. It may happen for a variety of reasons, including non-compliance with rules and regulations or not being able to meet the financial requirements.

The companies are bound to align with certain financial standards to have a minimum share price, level of sales, and financial ratios. In such cases, the exchange may initiate the delisting process, which can have significant consequences for the company and its shareholders.

It's crucial to keep in mind that the stringent rules and regulations may vary as per the different stock exchanges. Companies considering delisting or facing the possibility of involuntary delisting should carefully review the applicable rules. They should also seek professional advice to understand the implications and available options.

What if I Missed Out on My Delisting Application?

In the event of missing out on applying for delisting, two solutions are available:

• Shareholders can tender their shares offline directly to the company, which will repurchase them. Generally, the shareholders are given a one-year window from the date of delisting to tender their shares.
• They have the flexibility to submit their shares for repurchase at any time during this period. The company will determine the repurchase price, which will be based on the exit price specified by the company. This provides shareholders with an opportunity to sell their shares back to the company despite missing the initial delisting application process.

In the event of missing out on the application, two solutions are possible:

• The company registrar rolls out an exit application form to all the shareholders. Shareholders need to fill out and submit this form.
• The securities held in the shareholder's DEMAT account must also be transferred to the company's designated DEMAT account using an off-market transfer method. Shareholders can initiate this transfer process by contacting their depository participant and submitting a Delivery Instruction Slip (DIS).

You must submit an exit application form to the registrar and a photocopy of your DIS, attesting that the dematerialized equity shares have been transferred to the special depository account.

Conclusion

• There can be numerous reasons why a company gets delisted.
• Missing out on applying for delisting is not the end of the road, but merely a detour that compels us to navigate alternative paths.
• However, taking proactive steps like maintaining strong financial health, steering clear of any legal problems, and complying with regulatory compliance while staying ahead of the curve is necessary.
• To do that, you must keep yourself constantly updated.

Related Articles: How to close a Demat Account with delisted shares | What Is Share Delisting And How To Sell Delisted Shares?