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SEBI to relax mutual fund exposure norms for housing finance companies

SEBI decided that an additional exposure to financial services sector (over and above the existing 30%) not exceeding 10% of the net assets of the scheme in debt oriented mutual fund schemes will be allowed by way of increase in exposure to HFCs only

Mumbai: Providing respite for housing finance companies (HFCs), market regulator Securities and Exchange Board of India (SEBI) decided to relax the investment limit for such entities in debt mutual funds, reports PTI.

 

The decision to relax the exposure norms for HFCs was taken at SEBI's board meeting.

 

"... it has been decided that an additional exposure to financial services sector (over and above the existing 30%) not exceeding 10% of the net assets of the scheme in debt oriented mutual fund schemes will be allowed by way of increase in exposure to HFCs only," SEBI said in a press release.

 

According to the regulator, the decision has been taken after taking into consideration the important role played by HFCs in fulfilling the social objective of increased home ownership and supporting the economy by creating demand for construction of new homes.

 

In a circular last month, SEBI had directed mutual funds to ensure that total exposure of their debt schemes in a particular sector shall not exceed 30% of the net assets of the scheme.

 

However, the move had raised concerns of adversely impacting the funding costs for HFCs.

 

Regarding this decision, SEBI said the relaxation would be subject to certain conditions such as that the securities issued by HFCs are rated 'AA' and above. Also, the HFCs should have been registered with the National Housing Bank (NHB).

 

"However, the total investment in HFCs cannot exceed 30% of the net assets of the scheme," the release said.

 

Earlier this week, rating agency ICRA had said that SEBI's directive for investment caps on debt mutual funds could adversely impact the funding costs for NBFCs and HFCs.

 

Certain debt mutual fund schemes, such as long-term FMPs (Fixed Maturity Plans) have been a preferred route for the NBFC (Non-Banking Finance Company) sector to raise medium to long term funds at attractive rates from the bond markets, ICRA said in a research note.

 

Under the regulatory framework, NBFCs include HFCs.

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Open offers worth Rs2,460 crore in April-August: SEBI

Between April-August 2012, shareholders received a total of 33 open offers worth Rs2,460 crore, says SEBI

New Delhi: Open offers worth Rs2,460 crore were made to buy shares from public shareholders in the first five months of the current fiscal, reports PTI.

 

Between April-August, shareholders have received a total of 33 open offers worth Rs2,460 crore, Securities and Exchange Board of India (SEBI) said in its latest monthly bulletin.

 

Of these, 16 open offers worth Rs1,613 crore were made for substantial acquisition of shares. This is the highest number of offers made for this category since 2008-2009 fiscal.

 

In the month of August 2012 alone, 11 public offers were made, which is the highest number for a month this fiscal.

 

These offers worth Rs838 crore are substantially higher than offers worth Rs467 crore July, 2012.

 

According to SEBI regulations, pursuant to substantial acquisition of shares or change in control in a listed company, an acquirer has to make an offer to the public shareholders, known as open offers, so as to give them a fair opportunity to exit the company if they so wish to.

 

Open offers are made with the objective of change in control of management, consolidation of holdings or substantial acquisition in a company.

 

Seven public offers worth Rs825 crore in August were made to acquire substantial quantity of shares without acquiring control of the management, SEBI said.

 

Four offers worth Rs 14 crore with respect to change in the control of management were made in August. This, however, is the lowest number of such issues in the last five months.

 

The month did not see any open offers for consolidation of holdings in a company.

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