03/10/2022 - Economy

KEY POINTS

·        The regulator has mandated disclosures for IPO-bound companies in the form of key performance indicators and price per share of issuers based on past transactions and fundraising.

·        Non-promoter shareholders offering shares through the offer for sale (OFS) mechanism no longer have to hold a minimum of 10% in the company to offload the shares.

·        All shareholders holding Rs 25 crore and more will be eligible. Retail investors have been allowed to bid for the unsubscribed portion of non-retail segment.

·        This will particularly benefit consumer-facing companies and public sector undertakings that seek wider retail participation.

·        The other change that will benefit PSUs is the scrapping of the requirement of calculating 60 days’ volume-weighted average price for determination of open offer price during disinvestment.

·        Alternative investment fund regulations have been amended to prescribe the timeline for declaring ‘first close’ of a scheme along with the minimum corpus at which the first close may be declared.

·        This is welcome as regulations were silent on when a fund needs to be launched or complete its first close after it is registered with Sebi.

·        The regulator’s move to bring mutual funds under the ambit of insider trading regulations has been generally viewed unfavourably, especially because it seems to be the result of misdeeds committed by a single fund house. 

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