The Securities and Exchange Board of India (Sebi) has proposed to cut the timeline for listing of shares within 2-3 days of the IPO from the current level of 12 days and a fast-track route for share sales, aimed at meeting the disinvestment targets.
In order to facilitate divestment of public sector companies, Sebi has proposed that the fast-track issue route should be available to them without the requirement of a minimum average market capitalisation of public shareholding subject to PSUs complying with all the other existing conditions for fast-track route.
Also, in cases where PSUs are unable to comply with any of these conditions, Sebi may, based on the merits of the case, consider granting exemption, it said in a discussion paper.The fast-track route of raising capital has been proposed for companies having public shareholding market valuation of as low as Rs 250 crore, against Rs 3,000 crore now.
Under the fast-track route, a listed company would not be required to file any draft offer document for its FPO or rights issue and they can proceed with fund-raising programme without necessarily getting ‘observations’ from Sebi.
Sebi has invited public comments till January 30, after which it would put in place final norms for e-IPO as well as for fast-track issuances.Initially, investors would be able to place bids through internet and by using broker terminals across the country.
A framework for use of mobile applications for making bids in public issues can also be put in place for implementation in future, Sebi said.Investors would also get SMS or e-mail alert for allotment under the IPO, similar to alerts being sent to investors for secondary market transactions. Further, on account of reduction in printing of application forms, the overall cost of public issues will also come down. The post issue timelines will reduce from T+12 days to T+6 days.
“Once the process gets stabilised, timelines can be further curtailed to T+3/2 days. Further, on account of reduction in printing of application forms, the overall cost of public issues will also come down,” the Sebi paper said.
Sebi said that these proposals may be used for debt issues as well. However, in order to make this mechanism applicable to debt issues, suitable amendments may be required under SEBI (Issue and Listing of Debt Securities) Regulations, 2008. The proposed moves are part of efforts to simplify the process of IPOs, lowering their costs and helping companies reach more retail investors in small towns, it said.