SEBI clears more shares for retail, IPO norms for insurers

Mumbai: In the face of flooding of IPOs, the Securities and Exchange Board of India (SEBI) today doubled the limit for retail investors to Rs2 lakh and tightened the norms for firms to guard against unnatural hyping of the issues. The market regulator also paved the way for public offerings by insurance companies by issuing disclosure and accounting norms, PTI reports.

Addressing journalists after a meeting of the SEBI Board this evening, SEBI chairman C B Bhave discussed issues ranging from abuse of issuance of preferential share norms in favour of promoters, to the role of the media and agencies generating coverage for public issues where risk factors are virtually hidden. He, however, said that some more time would be needed to revamp the norms for acquisition of listed firms.

“The Board decided that the maximum application size for retail individual investors may be increased to Rs 2 lakh across all issues,” Mr Bhave said.

 The market regulator also asked the companies coming out with IPOs to come clean on their media coverage in the run-up to the public issue by making adequate disclosures with the regulator and investors about all the news reports. The provision is meant to ensure that the information appearing in the media is consistent with the disclosures made in the public offer document.

 “The Board (has) decided that the merchant bankers may submit a compliance certificate as to whether the contents of the news reports that appear after filing of draft offer document are supported by disclosures in the offer document or not,” Mr Bhave said. SEBI also asked the companies to announce a fixed date for payment of dividend and issue of bonus shares for the benefit of investors.

While clearing the much-awaited norms for insurance IPOs, the market regulator also paved the way for rights shares issuances for companies listed in India through Indian Depository Receipts (IDRs). “In order to ensure uniform treatment for all classes of investors in rights issues, the Board decided that only one payment option may be given by the issuer to all the investors, that is either (i) part payment on application with balance money to be paid in calls or (ii) full payment on application. The Board also decided that where the issuer opts for part payment, it shall be incumbent on them to obtain approvals, if any, as may be necessary for the purpose,” he said.


SBI to launch merchant-acquiring business soon

New Delhi: State Bank of India (SBI) has said it will soon launch a business that facilitates payment through debit or credit cards at retail outlets and that it is deciding on the shareholding pattern with foreign partners, PTI reports. "We would be finalising the equity ratio with the joint venture partner soon, post which the merchant-acquiring business would become operational," OP Bhatt, chairman of SBI, said today.

The merchant-acquiring business is a facilitation of payment through debit or credit cards at retail outlets. SBI plans to place about 1.50 lakh point-of-sale (PoS) terminals for debit and credit card payments across the country.

The Reserve Bank of India has already approved SBI's proposal to set up a wholly-owned subsidiary for the merchant-acquiring business in the name of SBI Payment Services. US-based Elavon Incorporation and Visa International are joint venture partners for SBI's merchant-acquiring business. The business penetration of the new operation is envisaged on a pan-India scale, with metro, urban, semi-urban and rural centres.

Last year, the bank had floated 'Request for Proposal' for selection of a joint venture partner for the merchant-acquiring business. The business would include acquiring bank identification numbers from the schemes, as well as managing services for PoS terminals. The managed services would include deployment of PoS terminals at customer locations, their replacement, merchant training and maintenance.

The State Bank group has over 21,000 ATMs across the country and has issued over 60 million debit cards.


More time needed on takeover code: SEBI

Mumbai: Market regulator Securities and Exchange Board of India (SEBI) today said it needs more time to decide on the new takeover code - wherein proposals have been made to give retail investors parity with promoters, and also for open offer for cent per cent stake in acquisitions, reports PTI.

A decision could not be made in today's board meeting and the issue would be taken up again in the next meeting of the board, SEBI chairman CB Bhave told reporters here.

The regulator has already collated all the public comments on the proposed draft Takeover Code.

In July, a SEBI committee, under the chairmanship of C Achuthan, had proposed changes in the current takeover rules, to give more rights to minority shareholders.

The panel had also recommended making it mandatory for acquirers to make an offer for up to 100% stake in any listed company.

At present, an open offer for a minimum of 20% in is required to be made by any entity that has purchased 15% equity, either from the promoters or the open market.

The committee had also suggested an increase in the open offer trigger point to 25%, from 15% now.

Sources said that there have been mostly positive comments on the guidelines proposed in the draft Takeover Code, especially for the one enhancing the public offer trigger point to 25%.

However, there is no unanimous view on acquirers being asked to make an offer for the entire 100% holding in the public offers so that public shareholders also get an opportunity along with promoters to exit.

The new code has also proposed to bring in parity in pricing for promoters and non-promoter shareholders. It proposes that minority shareholders also get the same price as a substantial shareholder and provide a level playing field to all stakeholders, whether they are promoters or small investors.

At present, the promoters and some large shareholders get better price by way of non-compete fees and other payments from the buyers and these are not available to small investors.


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