Having opened the qualified institutional buyer (QIB) placement route for listed Indian firms to raise funds in the domestic market, the Securities and Exchanges Board of India (Sebi) is now working on the Indian Depository Receipts (IDRs) channel for overseas firms to tap the Indian markets for funds within this calendar year.Addressing a seminar on ‘Recent Developments in Capital Markets’ organised by the Bengal Chamber of Commerce and Industry here today, Sebi chairman M. Damodaran said the QIB placement option has been tailored to stall India Inc from looking off-shore for funds and instead get them to tap the resources available in the domestic market.‘‘We have found that most of the companies raise only 10 per cent of their fund requirement in the domestic market and prefer to use the GDR and FCCB route to raise the money they need off-shore,’’ Damodaran said. The QIB placement shorn of any lock-in period is slated to change this practice.‘‘The rules for IDRs were in place a couple of years ago. We have only revisited them and recommended some changes,’’ Damodaran explained.‘‘Only two-three things need to be changed and they (the overseas companies) will be here,’’ he added. These changes include the removal of the norm that the companies should have paid dividend in at least three of the last five years and the required size of the company’s networth.Sebi is also gearing up to turn its attention on the distribution of mutual funds. Pointing out that distribution of mutual funds is already regulated in other countries, he added that the intermediaries dealing with distribution will be given the opportunity to come up with suggestion for regulations in a participative manner.Damodaran spared no punches when reviewing the critique presented by the Indian media on the optional grading of IPOs introduced by Sebi and other such initiatives. He added that in future if any merchant banker slips up on matching the norms even in the case of one IPO, Sebi will not be charitable and black-list the banker.
