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The market regulator SEBI will approach its board for an in-principle approval of a proposal to list Indian companies on overseas platforms, a source told BusinessLine.
A proposal by SEBI to let Indian companies list their equity on foreign exchanges and vice-versa requires amendments to various laws, including foreign exchange management, Companies Act, and approval from the RBI. It is for this reason that the regulator will seek an in-principle approval from its own board, the sources added.
A SEBI meeting will be held on Wednesday.
A panel had recently suggested to SEBI that Indian companies should be allowed to list overseas if they meet certain conditions, without a simultaneous listing in the domestic market. The NSE, under its previous management led by Chitra Ramkrishna, had first proposed the idea of listing overseas without listing in India.
Among other agenda items, the SEBI board will also discuss widening the scope of the offer-for-sale (OFS) route, yet another stake dilution mechanism currently available to the top 200 companies. The regulator is likely to allow any company with a market capitalisation of more than ₹1,000 crore to use the OFS route for stake-dilution, the source said. The regulator is also planning to relax its disclosure norms for housing finance companies and systemically-important NBFCs regarding pledged shares of listed firms and also provide for cancellation of an OFS in the event of limited interest from non-retail shareholders.
Segregation of MF assets
With regard to the mutual fund industry, which is facing the brunt of a debt crisis, SEBI proposes to ask funds to segregate assets categorised as bad in a separate scheme, the sources said. SEBI is also planning to bring in a lock-in period for investments in liquid funds, in which mostly large companies park idle cash. The regulator wants to make it mandatory for liquid funds to mark-to-market the value of more bonds.
Most banks churn their portfolios around the end of a quarter to meet capital adequacy norms by selling securities before the three-month period comes to an end.
This way, that investment is not required to be provided for while calculating capital adequacy.
They repurchase the same instruments within a week. But the activity is known to have caused huge volatility in the markets.
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