Sebi further empowers the retail investors

PFW Bureau /  Nov 30

Securities and Exchange Board of India (SEBI) has made several amendments in the Disclosure and Investor Protection (DIP) Guidelines to bring more depth in the equity market.

SEBI in  a 31-page circular has permitted companies making public issues  to offer securities to the retail investors and retail shareholders at a discounted price. However, such discount should not exceed 10% of  the price at which securities are issued to other categories of the investors. 

The regulator enabled the retail investors to apply in Indian Depository Receipts (IDRs) issues provided 50% of the issue being subscribed by Qualified Institutional Buyers (QIBs). The regulator has reduced  the minimum application value in IDRs from two lakh rupees to Rs 20,000. Currently,  only QIBs can apply in IDR issue.

SEBI said that the application by shareholders of listed companies under the reserved quota has been restricted to the retail shareholders. Currently, the listed companies making public issues can make reservation on competitive basis for its existing shareholders who, as on the record date, are holding shares of Rs. 50,000.
SEBI has made it mandatory for the investors  to quote PAN in application forms for public and rights issues irrespective of the value of the application form. Presently, applicants in public and rights issues are required to disclose their PAN in the application form only if they are making an application for more  than Rs.50,000.

Sebi said that the listed companies satisfying specified requirements can make Fast Track Issues through Follow-on Public Offerings and Rights Issues. The eligibility criteria for this purpose  contains minimum market capitalisation of public holding, trading turnover, track record of compliance with listing requirements and investor grievance redressal.

Securities and Exchange Board of India (SEBI) has made these necessary changes in SEBI (Disclosure and Investor Protection) Guidelines, 2000.

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