Crompton Greaves,which had announced a buy-back of its equity shares on July 4,has said that it will now commence the proposed buy-back only after incorporating amendments suggested by the Securities and Exchange Board of India (Sebi).
The firm has said that is in an advanced stage of fulfilling Sebis additional requirements from its revised buyback norms.
On June 25,Sebi came out with the revised buyback norms. Under the revised norms,companies need to create an escrow account towards security for performance with an amount equivalent to at least 25 per cent of the amount earmarked for the buyback.
Further,the minimum buyback has been increased to 50 per cent of the amount the buy-back amount,as against the existing 25 per cent,failing which the amount in the escrow account would be forfeited subject to a maximum of 2.5 per cent of the amount.
The buyback period has also been reduced to six months from 12 months.
Companies going in for buyback will not be permitted to raise further capital for one year from the closure of the buyback,except to discharge of subsisting obligations. Further,another buy-back offer cannot be made within one year from the date of closure of the preceding offer. Promoters are also barred from executing on-market or off-market transactions during the buy-back period.
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