SEBI--Divestment

Strategic Divestment of Associate Company Stakes by Listed Entities : Regulatory Disclosure Imperatives

CS. Raksha Sankhlecha

The divestment of stakes in associate companies by listed entities is a pivotal corporate action with significant implications for stakeholders. Ensuring timely and accurate disclosures, as mandated by SEBI LODR, is essential for fostering market transparency and maintaining investor trust. Such practices underscore the commitment of listed entities to uphold regulatory standards and promote an equitable financial environment.

1. Introduction

Under the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ('SEBI LODR'), listed entities are obligated to disclose material events or information to stock exchanges, ensuring transparency and equitable access to information for all market participants. The determination of materiality for such disclosures is guided by Regulation 30(4) of SEBI LODR. Certain events, outlined in Para A, Part A of Schedule III, mandate disclosure irrespective of materiality thresholds.