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Market Intelligence › Basic Terminologies
Voluntary and compulsory delisting, reverse book building, and the shareholder's options
Published by The Retail Trader · AUG 09, 2026 · Market Basics
Delisting means the company's shares will no longer trade on the exchange. Your ownership does not end, but the easy way to sell it does — and that is the real risk.
In voluntary delisting, the promoter buys back the public shareholding and wants to take the company off the exchange. Here the price is set by reverse book building, where shareholders offer their own price.
Compulsory delisting happens as a penalty, when a company keeps failing on rules or filings. Here there is no good outcome for the shareholder.
During delisting these options and limits apply:
• You can tender your shares in the offer, if the price seems right.
• If you do not tender, the shares stay with you, but unlisted.
• To sell an unlisted share you have to find a buyer yourself, and you have no control over valuation.
• After compulsory delisting the promoter has an obligation to make an exit offer, but that process is long.
In very small and thinly traded companies, delisting is a real possibility, not just a theory. When taking a position in an illiquid name, look at the exit route, not only the upside scenario.
This article is for education only — it is not a buy or sell recommendation, makes no claim of guaranteed returns, and is not advisory. Rules, rates and mechanics change from time to time with the exchange, SEBI and RBI, so verify every number yourself with your broker or an official source.