Delisting of securities refers to the process by which a publicly-listed company removes its shares from trading on a stock exchange, thereby becoming a private company. Delisting can occur voluntarily at the company’s initiative or involuntarily due to non-compliance with exchange regulations or financial distress.
A recognized stock exchange may, Delist any securities listed thereon on any of the following grounds :—
(a) the company has incurred losses during the preceding three consecutive years and it has negative networth;
(b) trading in the securities of the company has remained suspended for a period of more than six months;
(c ) the securities of the company have remained infrequently traded during the preceding three years;
(d) the company or any of its promoters or any of its director has been convicted for failure to comply with any of the provisions of the Act or SEBI Act, 1992 or the Depositories Act, 1996 or rules, regulations, agreements made thereunder, as the case may be and awarded a penalty of not less than rupees one crore or imprisonment of not less than three years;
(e) the addresses of the company or any of its promoter or any of its directors, are not known or false addresses have been furnished or the company has changed its registered office in contravention of the provisions of the Companies Act, 2013, or;
(f) shareholding of the company held by the public has come below the minimum level required.
(However, No securities shall be delisted unless the company concerned has been given a reasonable opportunity of being heard )