With the amendments to the Disclosure and Investor Protection Guidelines coming into effect on Thursday, companies planning initial public offers (IPOs) will now have to compulsorily list shares on at least one exchange with a national presence. Companies will also be allowed to rope in anchor investors for public issues.
In a notification issued to merchant bankers and stock exchanges on Thursday night, the Securities and Exchange Board of India (Sebi) said the rules would be applicable to all red herring prospectuses filed after Thursday and also to drafts pending with the regulator. Through the amendment, the regulator has allowed companies to sell a maximum of 30 per cent of the shares kept aside for qualified institutional buyers in a public offering to anchor investors.
The minimum application size for anchor investors has been fixed at Rs 10 crore. Allocations made to anchor investors would be locked in for 30 days. They would be allowed to bid for shares one day before the issue opens, and the process would be completed the same day.
After the issue opens, if the price arrived at through book-building was higher than what anchor investors paid for their stake, they would have to pay the difference. But if the price paid by anchor investors was higher than the discovered price, the investors would not get a refund. The revised guidelines also permitted shares that were allotted due to conversion of any security, such as bonds and depository receipts, to be eligible for sale in IPO provided it met the one-year norm in total.
Earlier, Sebi had allowed investors to offer their stake in an IPO only if they held it for a year or more.
