Domestic rating agency Credit Analysis & Research Ltd (CARE) has got the go-ahead from the market regulator Sebi for its proposed initial pubic offer.
CARE had filed its draft red herring prospectus (DRHP) with Sebi (Securities and Exchange Board of India) about a year ago for the proposed public offer, which would comprise sale of about 72 lakh shares by its shareholders.
While the exact size of the offer is yet to be determined, the shares to be sold would constitute 25.22% of the company's post-offer equity capital.
Sebi issued its final observations on the draft offer documents on September 24, as per the latest update by the market regulator. Sebi's observations are necessary for the companies to launch any public offer.
The main promoters of CARE are two domestic banks, IDBI Bank and Canara Bank, and the company competes with other rating agencies like Crisil and ICRA, which are already listed on the stock exchanges.
The proposed offer is being made by the selling shareholders and there will be no fresh issue of shares by CARE. As a result of which all the proceeds would go to the selling shareholders and not to the company.
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The shareholders selling their shares in the offer include IDBI Bank, Canara Bank, SBI, IL&FS, Federal Bank, IL&FS Trust (for shares held on behalf of Milestone Fund), Milestone Trusteeship (for shares held on behalf of Milestone Army Trust), ING Vysya and Tata Investment.
Along with CARE, Sebi has given its go-ahead to a total of 10 companies between August and September for their public offers.
These firms include Goodwill Hospital, which had withdrawn its IPO in January 2012 due to poor investor response and again filed the draft papers with Sebi in May this year to raise Rs 98 crore.
Other companies that have got Sebi's green signal are Aurangabad Electricals Ltd, Repco Home Finance Ltd, Tara Jewels Ltd, Usher Eco Power Ltd, Harisons Steel Ltd, Supreme Alloys Ltd, IFCI Factors Ltd and TV vision Ltd.
Beside, companies like Tunip Agro Ltd, NKG Infrastructure and Mukesh Udyog have withdrawn their IPO plans, while Sebi has returned the documents of Madhya Bharat Agro Products Ltd.
Most of the companies plan to utilise their proposed IPO proceeds for capacity expansion as well as working capital requirements.