SEBI relaxes norms to raise funds

The Securities and Exchange Board of India (SEBI) on Tuesday relaxed the norms for technological start-ups to raise funds from the capital market, while easing the norms for issuance of Initial Public Offering (IPO) by companies.
The capital market regulator reduced the post-listing lock-in period for tech start-up promoters to six months, instead of three years for other IPOs.

“Exchanges will have a separate platform, Institutional Trading Platform (ITP), and would facilitate capital raising as well for start-ups,” said SEBI Chairman U.K. Sinha while addressing press conference here after its board meeting.
1Exchanges will have a separate platform for start-ups
2Reduces post-listing lock-in period for tech start-up promoters to six months
3Rationalises the framework for reclassification of promoters as public
It also said that this platform is accessible to companies, which are intensive in their use of technology, information technology, intellectual property, data analytics, bio-technology, nano-technology to provide products, services or business platforms with substantial value addition and with at least 25 per cent of the pre-issue capital being held by QIBs (qualified institutional buyers), or any other company in which at least 50 per cent of the pre-issue capital is held by QIBs.
However, “no person (individually or collectively with persons acting in concert) in such a company shall hold 25 per cent or more of the post-issue share capital,” SEBI added.
It also shortened listing period of IPOs from 12 days to six days. “IPO process streamlined to reduce time period for listing of issues from 12 days to 6 days,” said Mr. Sinha.
Exchanges will have a separate platform, Institutional Trading Platform (ITP), and would facilitate capital raising as well for start-ups, says U. K. Sinha, SEBI Chairman
“While reducing cost of public issues, issuers will have faster access to the capital raised and investors will have early liquidity,” said SEBI Chairman.
SEBI reduced the requirement of market capitalisation of public shareholding of the issuer for Fast Track Issues (FTI) from Rs.3,000 crore to Rs.1,000 crore in case of Follow on Public Offering (FPO) and to Rs.250 crore in case of Rights issue.
“This will help more listed companies to raise further capital using fast track route.”
SEBI has also announced measures to encourage greater retail participation in Offer for Sale (OFS) through stock exchange mechanism.
It also rationalised the framework for reclassification of promoters as public. SEBI said that the proposed framework will bring in consistency and also enable investors to take informed decisions based on any such move by the company/promoters.
While streamlining the process of IPOs, SEBI allowed Registrar and Share Transfer Agents (RTAs) and Depository Participants (DPs) also to be allowed to accept application forms (both physical as well as online) and make bids on the stock exchange platform. This will be over and above the stock brokers and banks where such facilities are presently available. “This would substantially enhance the points for submission of applications.”

Comments

Post a Comment

Popular posts from this blog

Cheque & Types

Image
Cheque:  Section 6 of the Negotiable Instruments Acts, 1881, states "A cheque is a bill of exchange drawn on a specified banker, and not expressed to be payable otherwise than on demand." So, a cheque is a written instruction to a bank (also called the drawee bank) asking it to pay a specific sum of money to the person/company whose name is written on it. The person issuing the cheque is called the drawer and the one to whom it is issued is called the payee. Types of cheques  cheques are of basically four types Open cheque: A person holding an open cheque can  i. Receive payment over the counter at the bank ii. Deposit the cheque into his account iii. Pass it to another person by endorsing the cheque on the reverse side Crossed Cheque: Payment of a crossed cheque cannot be made over the counter at a bank; it can only be credited into the payee's account. Cheques can be crossed by drawing two parallel lines across the top left corner. Bearer Cheque: A be
Read more

Non Performing Assets

Image
Non-Performing Asset   Loans and advances given by the banks to its customers are an Asset to the bank. Just for the sake of simplicity, we can understand that a loan (an asset for the bank) turns as NPA when the EMI, principal or interest component for the loan is not paid within 90 days from the due date. Thus a Bad Loan is a n asset that ceases to generate any income for the bank . As per RBI guidelines, NPA is defined as under: Non performing asset (NPA) is a loan or an advance where; i.     interest and/ or installment of principal remain overdue for a period of more than 90 days in  respect of a term loan, ii.    the account remains‘out of order’ in respect of an Overdraft/Cash Credit (OD/CC), iii.   the bill remains overdue for a period of more than 90 days in the case of bills purchased and  discounted, iv.   the instalment of principal or interest there on remains overdue for two crop seasons for short  duration crops, v .   the instalment of principal or interest
Read more

Government introduces “Place of effective management” (POEM) in IT Act

Image
Shell companies are the companies located abroad but controlled from India, to evade taxes. Government aims to curb them by introducing “Place of effective management” (POEM) in IT Act. Thereby, such offshore companies will be taxable in India, if key Management decisions are taken from India. Shell companies based abroad would have to pay taxes on their global income for a year if their  place of effective management (POEM)  is India. According to the Union Budget 2015-16, shell companies would be considered tax resident of India if their POEM is India, even for one day in a financial year. The key companies likely to be impacted are the Indian groups that have overseas subsidiaries that lack substance. Many Indian companies have subsidiaries in tax havens abroad which, in turn, do businesses in other countries. With this amendment — proposed to be made effective from the next financial year — all these companies will be bought under the Local tax jurisdiction. The requir
Read more