Sebi proposes easier delisting rules for low-float PSUs with 90% govt stake

SEBI has proposed relaxed delisting norms for public sector undertakings (PSUs) with over 90% government holding and low public float. The new framework would allow such companies to delist without the mandatory reverse book-building process if they meet specified conditions. The regulator suggests alternative mechanisms like fixed-price offers for these special cases, recognizing the unique challenges in PSU disinvestment. The consultation paper outlines safeguards including independent valuation requirements and enhanced disclosure norms to protect minority investors. This proposal could benefit 15-20 PSUs currently struggling to maintain minimum public shareholding requirements. SEBI has invited public comments on the plan which aims to facilitate the government's strategic divestment program while ensuring fair treatment of all shareholders. The move comes amid increasing instances of PSUs facing delisting challenges due to low liquidity and valuation mismatches. If implemented, the new framework could accelerate the government's asset monetization pipeline and improve efficiency in the PSU disinvestment process. Market participants have welcomed the proposal as a pragmatic solution to a long-standing issue, though some have called for additional measures to ensure transparency in the valuation process for such delistings.