Reverse Book Building in SEBI Delisting: How It Works

Reverse book building is how the exit price gets set when a company's promoters take it private in a voluntary delisting. Instead of the acquirer naming a price and shareholders accepting or refusing, public shareholders bid the price at which they are willing to sell, and the price that clears the required threshold becomes the discovered price. It is the reverse of a normal book build, where investors bid to buy. In India the process sits inside the SEBI (Delisting of Equity Shares) Regulations, 2021. Read on 23 September 2026 in SEBI's consolidated text (amended up to 3 September 2025), reverse book building is one of two routes: the fixed price route added in 2024 is the other, and a 2025 amendment made it the required route for a public sector undertaking delisting under the special provision for PSUs whose acquirer, with other PSUs, already holds 90 percent or more.

How does reverse book building work?

The process runs in a defined order.

1. The acquirer announces the delisting and a floor price is determined under Regulation 19A: the highest of the acquirer's 52 week volume weighted average purchase price, its highest purchase price in the last 26 weeks, the adjusted book value, the 60 trading day volume weighted market price for frequently traded shares, and a registered valuer's price for shares that are not frequently traded.
2. The bidding window opens. Public shareholders tender their shares with a price attached, at or above the floor price.
3. The discovered price is identified. It is the price at which the acquirer's shareholding plus the shares tendered reaches 90 percent of the total.
4. The acquirer decides. It may accept the discovered price, in which case all shares tendered at or below that price are bought at it, reject it, or make a counteroffer if the conditions below are met.
5. If 90 percent is not reached, the delisting fails and the company remains listed.

The mechanism gives public shareholders collective pricing power, because the acquirer cannot delist without their participation reaching the threshold. It also creates the well-known problem the 2024 amendment was aimed at: a small number of holders bidding at a very high price can push the discovered price well past any reasonable valuation.

What the 2024 amendment changed

SEBI approved amendments to the delisting regulations at its board meeting on 27 June 2024, and they reshaped the process in three ways that matter when reading a delisting announcement today. The amendment regulations took effect on 25 September 2024 and apply to delisting offers whose initial public announcement came on or after that date; an acquirer could still use the old rules until the sixtieth day after it.

A fixed price alternative. For companies whose shares are frequently traded, an acquirer can now use a fixed price route instead of reverse book building. The fixed price must be at least a 15 percent premium over the floor price. This route is available only where the initial public announcement was made on or after 25 September 2024.

A counteroffer below 90 percent. Regulation 22(4) as substituted in 2024 lets an acquirer that rejects the discovered price make a counteroffer when two conditions both hold: its post-offer shareholding plus the shares tendered is at least 75 percent, and at least 50 percent of the public shareholding has been tendered. The counteroffer must be made within two working days of the bidding period closing, and under Regulation 22(5) its price cannot be lower than the higher of the volume weighted average price of the shares tendered in the book build and any indicative price the acquirer announced. The counteroffer still succeeds only if the 90 percent test in Regulation 21 is then met.

Adjusted book value in the floor price. The amendment brought the concept of adjusted book value into the determination of the floor price, changing the base from which any premium is measured. The consolidated text excludes public sector undertakings from the adjusted book value limb.

What changed in 2025 for public sector undertakings

The SEBI (Delisting of Equity Shares) (Amendment) Regulations, 2025 were notified on 1 September 2025 and came into force on publication in the Gazette; SEBI's consolidated text footnotes the insertion as effective 3 September 2025. They added Regulation 38B, a special provision for a public sector undertaking, other than a bank, non-banking financial company or insurance company, where the acquirer together with other public sector undertakings already holds at least 90 percent of the shares of that class. A PSU below that holding is not covered by Regulation 38B and falls under the general rules. For one that is covered:

• Shareholders must approve the delisting by special resolution through postal ballot or e-voting.
• The delisting must use the fixed price process.
• The floor price includes a joint valuation report from two independent registered valuers, and the delisting price must be at least 15 percent above the floor so computed.

Reverse book building vs the fixed price route

What to watch in the filings

A delisting generates a dense sequence of exchange filings, and the sequence is the story:

• The initial public announcement, which fixes which regime applies, including whether the fixed price route is available at all.
• The floor price computation, now including adjusted book value.
• The bidding results, which show whether 90 percent was reached and at what price.
• The post-offer shareholding pattern, which is where the outcome becomes visible in the ownership record. See how to read a shareholding pattern.

Delisting also interacts with the takeover rules, since an acquirer building toward control files under SAST along the way. See what is a delisting offer, delisting vs buyback and what is a SAST open offer for the neighbouring mechanisms.

Flock reports these disclosures as the exchanges publish them, dated and linked back to source. Whether to tender, and at what price, is a decision this page does not make for you.