Skip to main content

Sebi suggests institutional trading platform

By
The Securities and Exchange Board of India ( Sebi) has suggested the newly introduced institutional trading platform ( ITP) be used by the central government for its disinvestment programme in unlisted public sector undertakings ( PSUs), sources have said.
“Currently, there is no real way for actual price discovery of unlisted companies.
Therefore, the ITP platform can be used for divesting stake in these,” said asource.
Introduced in 2013, the ITP is a mechanism for listing of companies without an initial public offering (IPO) or fund raising.
The Budget this year had set an ambitious target for divestment at Rs.41,000 crore and strategic sales at Rs.28,500 crore.
Sebi says the ITP platform could be used by strategic investors such as private equity or venture capital funds to take stake in unlisted companies. The Centre has been seeking help from Sebi in removing irritants in the share sale process. The department of disinvestment had asked Sebi to allow suspension in trading in a company on the day of its Offer for Sale ( OFS), the mechanism used to divest promoter holding. It had also asked Sebi to relax the two- day notice period to an exchange for an OFS.
These proposals were aimed to reduce volatility and a downward pressure on share prices. Sebi is yet to approve the requests. An analysis by it has apparently shown little correlation between share price volatility and an OFS announcement.
In the past, Sebi has experimented with aone- day notice period. According to the analysis, after August 2014, when the notice period had been two days ( T- 2) the prices of PSUs in which OFS was conducted were in arange of 0.5 per cent and 4.4 per cent. Between May 2013 and August 2014, when numbers,” the regulator stated in a board meeting note. Some PSUs have little freefloat and, hence, the increase in floating stock was substantial. For instance, in Steel Authority of India, the float increased by 40 per cent after its latest disinvesment. In Coal India, the rise was almost 100 per cent.
“The final correction in price depends on the market appetite and the overall size of the OFS vis- à- vis floating stock,” the regulator concluded.
Another proposal to the regulator was to hold an OFS on Saturday. Sebi didnt agree, saying it would only postpone the volatility. What it did accept was that the government could make public an OFS plan on Saturday, a market holiday, and conduct the share sale on Monday.
Business Standard, New Delhi, 24th July 2015

Comments

Post a Comment

Popular posts from this blog

Data storage norm splits digital payments industry

By
Data storage norm splits digital payments industry  India’s nascent digital payment industry could be thrown into disarray due to the demand by the Reserve Bank of India (RBI) that all user data be stored within the country, fears an industry grouping, which has termed the decision as “heavy-handed”, even as others, including the country’s largest digital payment provider Paytm, have hailed the move.  In a bid to narrow the growing schism, the industry is planning to send a formal representation to the regulator highlighting its concerns, a top official told ET.  “We are trying to build a consensus on the issue," said the person adding that the representation to the central bank will be ready this week.  RBI on April 6, mandated all payment companies—global and local—to set up data storage facilities within India by October. The stringent six-month deadline has attracted the ire of several sections of the industry that fear it will lead to a disruption of wel...
18 comments
Read more

Offer’s for all of you

By
Great Bumper Dhamaka Offer’s for all of you... It's Time to see your Business Online, WebeCreator Offer Website Designing with domain & Email @ nominal charges. For a year For More information visit us http://goo.gl/KlpppF call on 9890151261/9773197533  drop a mail to sales@webecreator.com
Post a Comment
Read more

Sebi to finalise options in commodities today

By
The Commodity Derivatives Advisory Committee of the Securities and Exchange Board of India ( Sebi) will meet on Friday with senior officials of the latter, to give a final shape to the rules on options trading in commodity futures, beside revising the warehousing norms to ensure good delivery on settlement. The decision taken, after discussing with the advisory committee, will be placed before the regulator’s board, to finalise the regulations. According to knowledgeable sources, three commodities in each segment, agricultural and non- agricultural, have been proposed for introducing options. It appears commodities from the soya and guar segments are preferred in the former. From the non- agri segment, it is likely that gold, silver and crude oil will be finalised. All these These have better liquidity and both the National Commodity and Derivatives Exchange and the Multi Commodity Exchange, respectively, will be able to introduce the options. In the equity segments, options ar...
17 comments
Read more