Securities and Exchange Board of India (Sebi) today proposed to substantially increase the offer price set by companies for delisting shares from the stock markets in a move aimed at helping small investors realise a higher price while tendering their shares to promoters for delisting.Under the proposal, the offer price should be at a premium of at least 25% of the floor price set for buying back the shares or fair value determined by an accredited rating agency, Sebi said.In a concept paper on the proposed SEBI (Delisting of Securities) Regulations 2006, the capital market regulator also proposed to correct the anomaly with regard to reference date for calculating the floor price. As per the proposal, the floor price would be fixed on the date on which the stock exchanges are notified of the board meeting in which the delisting proposal would be considered. This is to "correct the anomaly" that existed now as it was felt that there was "fluctuation in price from the time the decision to delist is taken by the board (of companies) and the public announcement," Sebi said.The changes are being necessitated after it was increasingly felt that the "book-building process, which was to aid in the determination of a fair exit value for the shareholders, was not fully achieving the said objective, and the perceived investor friendliness of the price discovery mechanism was not necessarily translating into genuine discovery of price," Sebi said.
