The Securities and Exchange Board of India (Sebi) Thursday reduced the time required for announcing price band of initial public offers (IPO) from five working days before the opening of the issue to two working days before commencement of the issue.
The regulator also tweaked the buyback norms, approved some amendments to takeover regulations, and approved some recommendations of R Gandhi committee on regulations circulars about market infrastructure institutions (MIIs), among others.
Sebi has approved specific regulations regarding the takeover regulations and decided to grant additional time for upward revision of open offer price till one working day before the commencement of tendering period.
The Sebi Board also approved changes to buyback regulations. The regulator has incorporated relevant provisions outlined under Sections 68 and 70 of the Companies Act, 2013 in the new Buyback Regulations to make it self-contained. As per the new Regulations, the buyback period has been defined as the period between the board of directors resolution or date of declaration of results for a special resolution authorizing the buyback of shares and the time on which payment consideration is made to the shareholders.
Sebi also reduced the time for financial disclosures in case of public issues and rights issues to three years as against the present duration of five years. Moreover, audited financial disclosures in the IPO offer document has to be made only on a consolidated basis. Audited standalone financials of the issuer and subsidiaries have to now be disclosed on the website of the issuer company.
On Rights Issues the threshold for submission of the draft letter of offer to Sebi has been increased to Rs 10 crore as against the earlier prescribed Rs 50 lakh.
Sebi has also reduced minimum anchor investor size to Rs. 2 crore from the existing Rs 10 crore.
The regular also tweaked the rules regarding underwriting of public issues, if 90 per cent of the fresh issue is subscribed in the main board IPO, underwriting will be restricted to that portion only and accordingly the requirement to underwrite 100 per cent of the issue without regard to the minimum subscription requirements has been deleted.
Sebi has approved some recommendations of the R Gandhi committee on review of regulation and relevant circulars about MIIs.
The board has permitted eligible domestic and foreign entities to hold up to 15 per cent shareholding in case of Depository and Clearing Corporation. Multilateral and bilateral financial institutions, as notified by the Government, have also been recommended to hold up to 15 per cent in an MII.
Sebi has limited tenure of Managing Director of an MII, for a for a maximum of two terms of up to 5 years each or up to 65 years of age, whichever is earlier. The requirement would also apply to existing MDs of MIIs.