Delisting of Shares: Meaning, Types, Process, and Impact

Key Takeaways
 

• Delisting of shares means a company removes its equity shares from a recognised stock exchange such as NSE or BSE, after which the shares stop trading publicly on that exchange.
   
• In cases of voluntary delisting of shares, SEBI regulations require promoters to provide an exit opportunity to public shareholders. This exit usually takes place through a reverse book building process where investors can sell their shares at a discovered price.
   
• Even after a company is delisted, investors still legally own the shares in their demat account, but trading on the stock exchange stops and liquidity becomes limited 

Sochiye aapne ek share kharida aur kuch time baad wo exchange par dikhna band ho gaya. Sounds confusing, right? This is where the concept of delisting comes in.

Delisting of shares means the removal of a company’s equity shares from trading on a recognised stock exchange such as NSE or BSE. After delisting, the shares are no longer available for public trading on that exchange, although investors may still hold them in their demat accounts.

I bought 100 shares of a company at ₹200 each, investing ₹20,000. Later the company decided to delist from the stock exchange. I then received an exit offer of ₹240 per share, allowing me to sell my shares during the delisting process.

Bonus Tip: In 2025, SEBI introduced a special route allowing certain PSUs with 90% government ownership to delist more easily from stock exchanges. 

Reasons for delisting the shares

The next step is to know why companies decide to remove their shares from a stock exchange when you understand what is delisting a stock.
 

You can better evaluate the risks and benefits of delisting from stock exchange before investing when you know these reasons.

What are the types of delisting?

It also becomes important to know the different ways in which delisting can happen when you understand what is delisting a stock. 
 

These two types help you see how delisting can occur either through company decisions or regulatory actions. This helps you evaluate the risks and benefits of delisting from the stock exchange when investing in listed companies.

What happens to the delisted stock?

Investors often wonder what happens next when a company’s shares are removed from a stock exchange.

• Shares remain in your demat account: You continue to own the shares even after the company gets delisted.
• Trading on stock exchanges stops: The shares cannot be bought or sold on NSE or BSE once they are removed from the exchange.
• Promoters may provide an exit opportunity: Promoters usually offer investors a chance to sell their shares during the voluntary delisting of shares.
• Liquidity becomes very limited: Finding buyers becomes difficult because the stock is no longer traded publicly.
• Investors may look for options on how to sell delisted shares: Possible options include promoter buyback offers or private off-market transactions.

You can protect your investment decisions when you know how to sell delisted shares.

Can a delisted stock come back?

Many investors assume that once a company is delisted, it disappears from the stock market forever. In reality, a company can return to the exchange in certain situations if it meets the required regulations.

1. Relisting on the Stock Exchange

A company can apply to list its shares again after being delisted if it meets exchange eligibility conditions.

2. Compliance with Listing Regulations

The company must follow disclosure rules and governance requirements before approval for relisting.

3. Fresh Listing Process

The company may need to go through a process similar to a new public listing to ensure transparency.

4. Investor Participation Again

Once relisted, the shares can be traded normally and investors can buy or sell them on the exchange.

These situations show that while delisting removes shares from exchange trading, it does not always mean the company cannot return. This possibility helps you better evaluate whether delisting of shares is permanent or temporary when making investment decisions.

Conclusion 

Delisting of shares removes a company from stock exchange trading, but it does not always mean the end of the company. You can handle such situations calmly and make more informed investment decisions in the market if you understand the reasons, types, and investor options.

FAQs Related to Delisting of Shares 

1. What does delisting of shares mean?

Delisting of shares means a company removes its stock from a stock exchange such as NSE or BSE. After delisting the shares can no longer be traded on that exchange. The company may either go private or stop meeting listing requirements.

2. How does delisting affect shareholders?

Delisting mainly affects shareholders by reducing liquidity. Investors may receive an exit offer from promoters during voluntary delisting. If they continue holding the shares, they may find it difficult to sell them because trading on the exchange stops.

3. What happens if a company gets delisted, but I still own its shares?

If a company gets delisted, you still remain the owner of the shares in your demat account. You may sell them during the exit offer provided by the company. If you miss the exit window, you may need to sell the shares through private transactions.

4. What should I do if I have delisted shares in my Zerodha account?

You still legally own them if you hold delisted shares in your Zerodha account. You can transfer them to another demat account or sell them through off-market transactions if a buyer is available. After transferring or disposing of the shares, you can close your demat account.

5. Can a delisted stock become listed again in the future?

Yes. A company can relist its shares on a stock exchange if it meets the listing requirements again. The company must follow regulatory rules and complete the listing process before its shares can start trading publicly again.