India’s markets regulator has unveiled a new fixed-price framework for the voluntary delisting of certain state-run companies, aimed at streamlining exits for the government and protecting minority investors amid changes to the price-discovery process.
India’s markets regulator has set out a new route for the voluntary delisting of some state-run companies, a move that could make it easier for the government to exit holdings while giving minority shareholders a clearer way out. In its 2025-26 annual report, the Securities and Exchange Board of India said the special framework is designed to reduce the friction caused by the old price-discovery process and to address the problem of inflated floor prices in public sector undertakings.
According to the framework, the new fixed-price route will apply only to eligible public sector companies that are not banks, non-banking finance companies or insurers. It will also be limited to cases where the government and other public sector entities together hold at least 90% of the company’s outstanding shares. The Economic Times reported that SEBI cleared the approach in July 2025, later formalising it in rules aimed at making delistings more straightforward for such companies.
The core change is in how the exit price is set. Instead of relying mainly on a market-driven reverse book-building process, the floor price will be the highest of three measures: the volume-weighted average price paid, or payable, by the acquirer over the previous 52 weeks, the highest acquisition price over the previous 26 weeks and the combined valuation from two independent registered valuers. Business Standard said SEBI introduced the fixed-price process in September 2024 as an alternative designed to bring more certainty for both acquirers and shareholders.
For investors, the key point is that the offer price must be at least 15% above the floor price. That does not guarantee a gain for every shareholder, because the actual outcome will depend on the price at which each investor bought the stock. The announcement therefore leaves small shareholders watching three numbers closely: the floor price, the final offer price and the window for exiting.
The framework also spells out what happens if investors do not sell immediately. Shares may cease to trade on the exchange after the delisting process concludes, while any unpaid money is transferred to the designated stock exchange and held for seven years so shareholders can make claims. After that, funds are moved under the applicable legal route, including the Investor Education and Protection Fund in companies covered by the Companies Act, 2013, or SEBI’s investor protection fund in other cases, according to the rules summarised by TaxTMI and Business Standard. For minority investors, the reform offers a clearer exit, but not a guaranteed windfall.
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