Published on:
September 29, 2023
Shaik Musrath

Delisting of Non-Convertible Debt Securities and Redeemable Preference Shares

Delisting is a term that often makes its way into financial news, and it can have a significant impact on investors and companies alike. While it's commonly associated with stocks, delisting can also occur with other financial instruments like non-convertible debt securities and redeemable preference shares. In this blog, we'll explore what voluntary delisting of these instruments means and why companies choose to take this route.

Non-Convertible Debt Securities and Redeemable Preference Shares: A Quick Overview

Before we delve into voluntary delisting, let's briefly define what non-convertible debt securities and redeemable preference shares are:

Non-Convertible Debt Securities

 These are essentially loans provided by investors to a company. In return, the company agrees to pay periodic interest (coupon payments) and return the principal amount to investors upon maturity. Unlike convertible debt, these securities cannot be converted into company equity.

Redeemable Preference Shares 

These are a type of equity security that combines features of both common stock and debt. They offer investors a fixed dividend like debt securities and can be redeemed by the issuing company at a predetermined date or at the discretion of the company.

Voluntary Delisting: What Does It Mean

Voluntary delisting, in the context of non-convertible debt securities and redeemable preference shares, refers to the company's decision to remove these instruments from a stock exchange where they are traded. This action is initiated by the issuer (the company) rather than being a result of non-compliance or regulatory action.

Why Companies Opt for Voluntary Delisting

Several reasons may lead a company to voluntarily delist their non-convertible debt securities or redeemable preference shares:

Cost Savings

Maintaining a listing on a stock exchange involves administrative and compliance costs. By delisting, a company can reduce these expenses.

Limited Trading Activity

If there is very little trading activity for these instruments on the exchange, the company might decide that the costs of being listed outweigh the benefits.


Some companies may prefer to keep certain financial information or transactions confidential, and delisting can help achieve this.

Maturity or Redemption

When non-convertible debt securities or redeemable preference shares reach their maturity or redemption date, the company may choose to delist them.


In cases of mergers, acquisitions, or corporate restructuring, delisting may be a strategic move to simplify the company's capital structure.

What is the Impact of Delisting on Investors

For investors holding these securities, voluntary delisting can have various consequences:

Liquidity Risk 

Delisted securities may become less liquid, making it challenging to sell them in the secondary market.

Price Volatility 

Reduced liquidity can lead to price volatility, potentially affecting the market value of the securities.

Limited Information

Companies may provide less financial information after delisting, making it harder for investors to assess their performance.


In some cases, investors may receive their principal amount upon delisting if the securities are redeemable.

Regulatory Safeguards

Stock exchanges and regulatory authorities often have rules and safeguards in place to protect the interests of investors during the delisting process. These may include providing exit opportunities to investors, ensuring fair valuation, and requiring disclosure of material information.


Voluntary delisting of non-convertible debt securities and redeemable preference shares is a strategic decision made by companies based on various factors, including cost considerations and corporate restructuring. For investors, it's essential to stay informed about the implications of delisting and any regulatory safeguards in place. If you hold such securities, consider seeking advice from a financial professional to navigate the changes effectively.


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Updated on:
September 29, 2023