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Give the details of "Reverse Book Building"?

Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 Renju M.R asked over 2 years ago

Hi, Please give me the complete detail of "Reverse Book Building". And also explain the purpose of this "Reverse Book Building" using in companies.?

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4 Answers
Open uri20170510 32134 1nqu8aj?1494421649 sowmya answered about 2 years ago

haii Reverse book building is the process by which a company that wants to delist from the bourses, decides on the price that needs to be paid to public shareholders to buy back shares. Here, it has to follow a detailed regulatory process. The first step is appointing a merchant banker to oversee the electronic bidding. The banker and promoter then advertise the offer and dispatch a letter detailing the floor price for the buyback to all public shareholders. Stock exchanges then facilitate a reverse book building process through an online, fully automated, screen-based bidding system. Shareholders who hold shares can approach trading members or brokers to relay their bids to the company. The tender price or the price at which the shareholder is willing to sell his shares needs to be equal or above the floor price notified by the company. The final buy back price will be determined only after the offer closes after aggregating all shareholder bids. For instance, in the case of Essar Oil, the final buyback price has been announced as ₹262.80 apiece. This is the price at which the holding of the promoter group hits 90 per cent, based on the offers received. Once the price is finalised, all offers below or equal to this final buy back price will be accepted. The offer is termed successful only if a minimum number of shares, as defined by regulation 17 (a) of the Delisting Regulations, are tendered by shareholders and accepted by the companies

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 HIMANSHU answered over 2 years ago

The Reverse Book Building is a mechanism provided for capturing the sell orders on online basis from the share holders through respective Book Running Lead Managers (BRLMs) which can be used by companies intending to delist its shares through buy back process. In the Reverse Book Building scenario, the Acquirer/Company offers to buy back shares from the share holders. The Reverse Book Building is basically a process used for efficient price discovery. It is a mechanism where, during the period for which the Reverse Book Building is open, offers are collected from the share holders at various prices, which are above or equal to the floor price

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 Manjunath answered over 2 years ago

Hi The Reverse Book Building is a mechanism provided for capturing the sell orders on online basis from the share holders through respective Book Running Lead Managers (BRLMs) which can be used by companies intending to delist its shares through buy back process. In the Reverse Book Building scenario, the Acquirer/Company offers to buy back shares from the share holders. The Reverse Book Building is basically a process used for efficient price discovery. It is a mechanism where, during the period for which the Reverse Book Building is open, offers are collected from the share holders at various prices, which are above or equal to the floor price. The buy back price is determined after the offer closing date .

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 Anil Dhawan answered over 2 years ago

** > Reverse Book Building (Delisting of shares) ------------------------------------------- ** The Reverse Book Building is a mechanism provided for capturing the sell orders on online basis from the share holders through respective Book Running Lead Managers (BRLMs) which can be used by companies intending to delist its shares through buy back process. In the Reverse Book Building scenario, the Acquirer/Company offers to buy back shares from the share holders. The Reverse Book Building is basically a process used for efficient price discovery. It is a mechanism where, during the period for which the Reverse Book Building is open, offers are collected from the share holders at various prices, which are above or equal to the floor price. The buy back price is determined after the offer closing date ** > Business process for delisting through book building is as follows: ** ------------------------------------------------------------------- The acquirer shall appoint designated Book Running Lead Manager (BRLM) for accepting offers from the share holders. The company/acquirer intending to delist its shares through Book Building process is identified by way of a symbol assigned to it by BRLM. Orders for the offer shall be placed by the share holders only through the designated trading members, duly approved by the Exchange. The designated trading members shall ensure that the security / share holders deposit the securities offered with the trading members prior to placement of an order. The offer shall be open for 'n' number of days. The BRLM shall intimate the final acceptance price and provide the valid accepted order file to the National Securities Clearing Corporation Limited (A wholly owned subsidiary of NSE carrying out clearing and responsible for settlement operations.) SEBI guidelines shall be applicable to delisting of securities of companies and specifically apply to: Voluntary delisting being sought by the promoters of a company. Any acquisition of shares of the company (either by a promoter or by any other person) or scheme or arrangement, by whatever name referred to, consequent to which the public shareholding falls below the minimum limit specified in the listing conditions or listing agreement that may result in delisting of securities. Promoters of the companies who voluntarily seek to delist their securities from all or some of the stock exchanges. Cases where a person in control of the management is seeking to consolidate his holding in a company, in a manner which would result in the public shareholding or in the listing agreement that may have the effect of company being delisted. Companies which may be compulsorily delisted by the stock exchanges.

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