SEBI AMENDS GUIDELINES ON FAST TRACK ISSUES AND ISSUE OF INDIAN DEPOSITORY RECIPIENTS

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The Securities and Exchange Board of India has amended the SEBI guidelines on Fast Track Issues and Issue of Indian Depository Recipients.

According to the new guidelines issued by the stock exchange regulator listed companies, satisfying specified requirements can make Fast Track Issues( FTI) through Follow-on Public Offerings and rights Issues. The eligibility criteria for the purpose include minimum market capitalisation of public holding, trading turnover, track record of compliance with listing requirements, investor grievance redressal and other requirements.

On the Issue of Indian Depository Receipts (IDRs), the existing guidelines have been amended to enable all categories of investors to apply for IDR issues subject to at least 50 per cent of the issue being subscribed by Qualified Institutional Buyers (QIBs). The minimum application value in IDR issues has been reduced to Rs 20,000 from Rs 2,00,000. Presently, only QIBs can apply in an issue of IDRs.

According to the new guidelines quoting of PAN in application forms for public/ rights issues has been also made mandatory, irrespective of the value of application.

Presently, applicants in public and rights issues are required to disclose their PAN/GIR in the application form only if they are making an application for a value exceeding Rs 50,000.

Companies making public issues are permitted to issue securities to retail individual investors / retail individual shareholders at a discounted price, provided that such discount ds not exceed 10 per cent of the price at which securities are issued to other categories of public.

Presently, the guidelines do not provide for issuance of shares at differential price to investors within the net public offer category.

Application by shareholders of listed companies under the reserved quota has been restricted to retail individual shareholders.

Presently, listed companies making public issues can make reservation on competitive basis for its existing shareholders who, as on the recorded date, are holding shares worth up to Rs 50,000 only.

Further, there is no limit on the value of the application made by such shareholders.

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