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To monitor the utilisation of issue proceeds in an initial public offering (IPO), Sebi has proposed the appointment of a monitoring agency for issues of all sizes. As per current regulations, monitoring agencies are compulsory only for IPOs with an issue size of over Rs 500 crore.
The proposal was part of a discussion paper released by Sebi on Tuesday titled ‘Monitoring Agency Report and Related Disclosures’.
“It is pertinent to extend the requirement of monitoring of utilisation of issue proceeds to all the companies to ensure that such instances are identified and addressed in accordance with extant legal framework. It will also strengthen the monitoring of utilization of all the equity capital raised through issuance of equity shares to public,” said the discussion paper on Sebi’s website.
The capital market regulator also added that the move was in keeping with the new Companies Act, 2013 which has included certain provisions for deviation in utilisation of issue proceeds.
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