Quite often companies prefer to delist as the pressures and exchange compliance of being listed are just too high. Also, it becomes essential for a listed company to ensure that prices don’t fall sharply or stocks do not get shorted to bring down the price. In the past, many companies like Cadbury, Novartis and Nirma have opted to delist their company where they did not see much value addition in staying listed.

The normal process is that once the delisting is approved by the exchange and by SEBI, the promoters will have to make an open offer to the public shareholders based on a set formula. As a shareholder, you have the right to exercise or not to exercise the option to offer your shares. You must remember that for a company to be delisted more than 90% of the shares must be bought back by the promoters. If the public holding goes below the 10% mark, then the company has the option to delist the shares and repay the remaining shareholders by mailing the cheque to their accounts. But that is only possible if more than 90% of the shares are surrendered by the shareholders. The same would apply for Prabhat stock also once they announce the delisting of shares.