SEBI’s discussion paper on Revisiting the capital raising process
Securities market, including the market for public offerings, is dynamic and need to keep pace with the evolving environment. In order to keep pace with the changing economic environment and to address concerns of various market participants especially the issuers and the investing community, the regulations governing the primary market have been amended from time to time. In a discussion paper on “Revisiting the capital raising process” issued by Securities and Exchange Board of India (SEBI) highlights that existing listed issuers have preferred private placement including Qualified Institutional Placement (QIP) route vis-à-vis a subsequent offerings by way of Further Public Offer (FPO) / Rights Issue. Further, participants in various forums have indicated that issuers have inclination towards private placement, because of shorter time frame and lower costs associated with such route. Therefore, SEBI has been examining how to further facilitate capital raising by existing listed companies through FPO/Rights issue so as to provide retail investors the opportunity to participate in subsequent offerings and enable issuers to raise capital in the shortest possible time span.
In view of above, SEBI has proposed on the following two areas:
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