NEW DELHI: Sebi has decided to revamp delisting norms for small companies within six months. The market regulator's board is working on a policy to delist small companies which are thinly traded and were listed during less regulated regime, according to Sebi chairman M Damodaran.
According to the existing norms, a company needs to go through reverse book-build method to get delisted. Under this, the offer price for delisting is decided by shareholders, at a price point where maximum number of shares are offered by them.

So, the promoters have to give much higher than the prevailing market price. In the small companies, where large chunk of floating stocks are with one or two groups, the offer price could be fixed at a very high point. This procedure needs a relook, Damodaran said.

Damodaran ruled out banning FIIs from issuing Participatory Notes (PNs) — instruments through which foreign investors can invest directly in the Indian stocks. These instruments are suspected to be one of the modes used by speculators in bringing down the stock market on May 17 (Black Monday) last year.

"We are not planning to ban PNs," Damodaran said on the sidelines of a CII session. He also dismissed speculations that there was a "spate of conviction orders in the pipeline" against FIIs for misusing the PN route to bring down the market on May 17, 2004.

However, he said Sebi was probing 11 more entities for possible involvement in May 17 market crash. Sebi has approached International Organisation of Securities Commission (IOSCO) to trace inflow of funds through PN route.