Five takeaways from Sebi's latest board meeting

Its not just start-ups which will have an easier time

The Securities and Exchange Board of India took a number of key policy decisions in its meeting on Tuesday.

This includes approving a more relaxed start-up listing framework, halving the time required to bring an IPO to market and making stake sales easier for already-listed companies.

Five of the key issues which were discussed, and the outcome of the deliberations are given below:

Faster IPO listing

The regulator has done away with issuing checks for IPO investment. All investors, including retail ones, will now have to come in through the ASBA route. The Application Supported by Blocked Amount (ASBA) route freezes money in an account and unlocks it if the allocation has not taken place. This obviates the need for refunds and reduces the time required for IPOs. Issue completion will reduce from 12 days after the transaction (T+12) to T+ 6.

 

Easier capital raising for startups

Startup companies would have easier disclosure requirements, and simpler rules for raising capital. The regulator has also limited participation in such issues, while introducing the laxer rules so that only sophisticated investors with the appetite to take on higher risk are able to participate. Start-ups will be able to raise capital through the Institutional Trading Platform.

Quicker stake sales by already listed companies

The regulator has reduced the market capitalisation requirement for companies to use fast-track Follow on Public Offerings (FPOs) and Rights issues to Rs.1000 crore and Rs.250 crore respectively. Steps have also been taken for greater retail participation in the Offer For Sale (OFS) route.

Reclassification of promoters

Earlier there was no way proper procedure in place for a promoter to declassify himself as a promoter, even if his stake had dropped significantly. The regulator has now provided a proper framework for addressing the issue.

Sebi-FMC Merger

The board deliberated on the operational issues in its merger with the commodities regulator, the Forward Markets Commission (FMC). Also the Sebi annual report has also been approved and will now be submitted to the Central government.