SEBI has cut the time for announcement of price band of IPOs to two days from five and recast share buyback norms. In a press meet, post its board meeting on Thursday in Mumbai, SEBI Chairman Ajay Tyagi also said they intended to further rationalise regulations for FPIs and mutual funds.

Safety net provisions go

“Under the new regulations, the buyback period has been defined as the period between the board of directors resolution/date of declaration of results for special resolution authorising the buyback of shares and the date on which the payment consideration is made to the shareholders,” a SEBI release said. Grading of IPOs may not be compulsory from now. SEBI, on Thursday, said it had deleted provisions pertaining to safety net and IPO grading. The provisions with regard to IPO safety net were first introduced in 2013 to ensure investment bankers act fairly while fixing IPO prices as it was observed then that over two-thirds of the issues listed in three years prior to 2013 were trading below their issue prices. SEBI also said that it had deleted the chapter relating to the institutional placement programme.

Among a few other changes approved by SEBI at its board meet are the public interest directors of stock exchanges and other market infrastructure companies will be limited to three terms of three years across entities. The MD can serve only two terms of five years.

The time for financial disclosures in case of public/rights issues will now be three years as against five years earlier. Restated and audited financial disclosures in the offer document are to be made on consolidated basis only. Audited standalone financials of the issuer and material subsidiaries will have to be disclosed on the website of the issuer company. Incorporation of the principles governing disclosures of Indian Accounting Standards (IndAS) on Indian GAAP (IGAAP) Financials. Threshold for submission of draft letter of offer to SEBI in case of rights issues to be increased to ₹10 crore, against the earlier prescribed ₹50 lakh.

Shortfall of up to 10 per cent in minimum promoters’ contribution may be met by institutional investors such as foreign venture capital investors, scheduled commercial banks, public financial institutions and insurance companies registered with the IRDA, in addition to AIFs, without being identified as “Promoters”.

For a company to be eligible to make a fast-track rights issue, it should not have any audit qualifications or adverse opinion.

SME anchors

For the SME IPOs, SEBI has reduced the minimum anchor investor size to ₹2 crore from the existing ₹10 crore.

The shareholding threshold for identifying the promoter group has been revised to 20 per cent from 10 per cent. On group company disclosure, definition of group companies has been made more specific by clarifying that group company/ies shall include such companies (other than promoter(s) and subsidiary(ies)) with which there were related-party transactions, during the period for which financial information is disclosed (three years), as covered under the applicable accounting standards and also other companies as considered material by the board of the issuer.

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