Earlier in May, capital markets veteran Prithvi Haldea had submitted a recommendations report to SEBI.
The Securities and Exchange Board of India (SEBI) has tweaked the IPO norms allowing firms to announce the price band two days before an offering. The market regulator said that firms coming out with maiden float can now provide the financial statements for the previous three, instead of current five years.
According to SEBI, the amendments are aimed at simplifying the language as well as removing redundant provisions. It will also update references to the Companies Act, 2013. This will encourage genuine companies to raise funds through the capital markets route.
Under the new regulations, the buyback period of the firm’s stock has been redefined. It will be the time between the board’s resolution to that effect and the date on which the payment will be made to shareholders.
“Threshold for submission of a draft letter of offer to SEBI in case of rights issues to be increased to Rs 10 crore as against the earlier prescribed of Rs 50 lakh,” the SEBI said in a release.
For the IPOs of Small Medium Enterprises (SME), SEBI has cut the minimum anchor investor size from the existing Rs 10 crore to Rs 2 crore.
The definition, for group companies, has been made more specific. Group companies now will include firms where related-party transactions happened, during the three years period for which financial information is disclosed.
In takeover regulations, entities will get additional time for upward revision of the open offer price during the share tendering period.
Existing sponsor entities have been given a time of five years to reduce their shareholding. They will be allowed to hold up to 15 per cent.
New norms also limit the tenure of the managing director and the CEO of an exchange. They can hold office for two terms, up to the age of 65 years. Independent directors can have three terms of three years each, up to the age of 75 years.