The Securities and Exchange Board of India (Sebi) brought in a slew of important changes, including disclosure of key performance indicators (KPIs) in public issues, during its board meeting held on Friday.
Other mandates include allowing pre-filing of initial public offerings (IPOs), inclusion of units of mutual fund units under insider trading regulations, framework to facilitate online bond platform providers, flexibility in approval process for appointment and removal of independent directors and monitoring of QIP and preferential issue proceeds.
Issuers coming out with IPOs will have to make disclosure of KPIs and price per share of issuer based on past transactions and past fund raising done by the issuer from the investors under ‘Basis for Issue Price’ section of the offer document, and in Price Band Advertisement.
“KPIs would be different for different companies in terms of business models they follow. The disclosures would reduce the information asymmetry for retail investors, as long as they are not forward looking statements,” said Sebi Chairperson Madhabi Puri Buch.
Issuer shall disclose details of pricing of shares based on past transactions and past fundraising from investors based on secondary sale or acquisition of shares during the 18 months period prior to IPO. In case there are no such transactions, information shall be disclosed for price per share of issuer company based on last five primary or secondary transactions, not older than three years prior to IPO.
The Board has given IPO issuers the option to pre-file offer documents. The pre-filing mechanism will allow issuers to carry out limited interaction with without having to make any sensitive information public. Further, the document which incorporates Sebi’s initial observations would be available to investors for a period of at least 21 days.
Further, the Board has decided to bring mutual fund units under the Sebi (Prohibition of Insider Trading) Regulations, 2015. FE