Sebi on Tuesday approved a slew of amendments to various regulations, including tightening rules for the utilisation of IPO proceeds. Changes have been cleared for regulations governing foreign portfolio investors, Alternative Investment Funds (AIFs), mutual funds, settlement proceedings, among others.
The decisions were taken at a meeting of the Sebi board in Mumbai on Tuesday. The watchdog has also decided to introduce provisions relating to appointment or re-appointment of persons who fail to get elected as directors, including as Whole Time Directors or Managing Directors or Managers, at the general meeting of a listed entity.
“Appointment or a re-appointment of any person, including as a Managing Director or a Whole Time Director or a Manager, who was earlier rejected by the shareholders at a general meeting, shall be done only with the prior approval of the shareholders,” Sebi said in a release.
The market watchdog also tightened rules on initial public offering, that have seen a sudden craze in India.
“In case of book built issues, a minimum price band of be at least 105 per cent of the floor price shall be applicable for all issues opening on or after notification in the official gazette,” it said.
It also extended the lock-in period for anchor investors at a time when shares of companies that went for IPOs have seen a dip post listing.
“The existing lock in of 30 days shall continue for 50 per cent of the portion allocated to anchor investor and for the remaining portion, lock in of 90 days from the date of allotment shall be applicable for all issues opening on or after April 1, 2022,” said the market regulator in a release.
The Sebi has further fixed the provisions for the OFS “(offer for sale) portion of an IPO, whereby selling shareholders receive proceeds from an issue.
“Shares offered for sale by selling shareholders, individually or with persons acting in concert, holding more than 20 per cent of pre-issue shareholding of the issuer, shall not exceed more than 50 per cent of their pre-issue shareholding. Shares offered for sale by selling shareholders, individually or with persons acting in concert, holding less than 20 per cent of pre-issue shareholding of the issuer, shall not exceed more than 10 per cent of preissue shareholding of the issuer,” it said.
For non institutional investors, the allocation conditions after for book built issues opening on or after April 01, 2022 have been revised as follows — i. one third of the portion available to NIIs shall be reserved for applicants with application size of more than two lakh rupees and up to ten lakh rupees, and ii. two third of the portion available to NIIs shall be reserved for applicants with application size of more than ten lakh rupees.
(With PTI Inputs)
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