Sebi rescues cos looking at OFS,IPP

Securities and Exchange Board of India Sebi has come to the rescue of companies that have done an offer for sale OFS or an institutional placement programme IPP,but are yet to comply with the minimum public shareholding norms.

n Relaxes requirement of 12-week cooling period between 2 stake sales via OFS route

The Securities and Exchange Board of India Sebi has come to the rescue of companies that have done an offer for sale OFS or an institutional placement programme IPP,but are yet to comply with the minimum public shareholding norms.

Sebi has relaxed the requirement of a 12-week cooling period between two successive stake sales done through the OFS route. While there has been no change in the guidelines,Sebi has been granting such exemptions on a case-to-case basis.

The recent past saw companies like Wipro and Bajaj getting such relaxation from the capital market regulator. Even Fortis Healthcare,Thomas Cook India and Puravankara Projects got a breather from Sebi for their proposed institutional placement programme IPP.

Sebi8230; has accorded consent to the promoter group entities to divest through the OFS route in the 12 weeks cooling period solely for the purpose of achieving minimum public shareholding, stated a stock exchange announcement by Bajaj Corp.

Merchant bankers say the regulator has been flexible in approving such requests by the companies as the deadline is fast approaching and that the watchdog has clarified it would support any genuine attempts to comply with the public shareholding norms.

Early this week,Wipro also notified the stock exchanges that the company has got Sebi approval to divest through the OFS route during the twelve weeks cool off period. According to latest shareholding pattern,promoters hold about 78.28 in the IT company.

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Meanwhile,Sebi allowed Fortis Healthcare,Thomas Cook India and Puravankara Projects to allot shares to less than 10 investors even as the regulations clearly stipulate that an IPP ought to have at least 10 allottees.

Further Puravankara Projects has also been allowed to dilute 14.96 equity stake through an IPP even though the extent of equity dilution has been capped at 10 for an IPP.

In a notice to the stock exchanges,the realtor said Sebi has approved the request of the company to issue equity shares aggregating up to 14.96 of the post issue capital through IPP with a minimum number of allottees being less than 10. The promoter stake in the real estate entity is pegged at 89.96.

It is estimated a little over 100 companies are yet to comply with the minimum public shareholding requirements under which promoters of private entities have to reduce their holding to 75 by June and government has to bring down their holding to 90 in all listed PSUs by August. Total value of such stake sales is estimated to be around R17,000 crore.