Skip to main content

Framework for issue of convertible bonds proposed

By
The Securities and Exchange Board of India ( Sebi) has proposed aframework for public issuance and trading of convertible securities by both listed and unlisted companies. Such securities are debt instruments that can be converted into equity at a later date. Investors get paid interest from the issuer till these are converted into equity.
Indian companies are allowed to raise capital through convertible securities, but the lack of a detailed framework has prevented these from being as popular as Initial Public Offerings ( IPOs) of shares or a rights issue. Following the Sebi board approval on Monday, the regulator issued a consultation paper on Tuesday.
Based on feedback from investment bankers, Sebi has proposed an issue of convertible securities, with a maximum tenure of five years.
Currently, there is no specific provision on this, except for financing of a group company, where the maximum tenure can be 18 months.
Sebi has sought feedback on whether to allow pricing of such securities to be done through either the book- building route or on a fixed- price basis. And, whether these be treated as debt instruments, so that debt regulations apply, or as equity and, hence, comply with the Sebi Issue of Capital and Disclosure Requirements regulations.
It has also proposed to allow issue of these by unlisted companies, provided the instruments be listed on the institutional trading platform (ITP). Currently, ITP is used for listing of smaller companies without necessarily doing an IPO.
Business Standard, New Delhi, 2nd Dec.2015

Comments

Post a Comment

Popular posts from this blog

Budget: Startup sector gets new Fund of Funds, FM to allocate Rs 10K cr

By
  The Indian startup sector received a boost with Finance Minister Nirmala Sitharaman announcing the establishment of a new fund of funds (FoF) in the Budget 2025. The minister unveiled a fresh FoF with an expanded scope, allocating Rs 10,000 crore. The initial fund of funds announced by the government with an investment of Rs 10,000 crore successfully catalysed commitments worth Rs 91,000 crore, the minister said.   “The renewal of the Rs 10,000 crore commitment to the Fund of Funds for alternative investment funds (AIFs) is a significant step forward for the Indian startup and investment ecosystem. The initial Rs 10,000 crore commitment catalysed Rs 91,000 crore in investments, and I fully expect this fresh infusion to attract an additional Rs 1 lakh to Rs 1.5 lakh crore in capital,” said Anirudh Damani, managing partner, Artha Venture Funds.   Damani further added that this initiative will provide much-needed growth capital to early-stage startups, further strengthenin...
Post a Comment
Read more

GST collection for November rises by 8.5% to Rs.1.82 trillion

By
  New Delhi: Driven by festive demand, the Goods and Services Tax (GST) collections for the Union and state governments climbed to Rs.1.82 trillion in November, marking an 8.5% year-on-year growth, according to official data released on Sunday. Sequentially, however, the latest collection figures are lower than the Rs.1.87 trillion reported in October, which was the second highest reported so far since the new indirect tax regime was introduced in 2017. The highest-ever GST collection of Rs.2.1 trillion was reported in April. The consumption tax figures highlight the positive impact of the recent festive season on goods purchases, providing a much-needed boost the industry had been anticipating. The uptick in GST collections driven by festive demand had been anticipated by policymakers, who remain optimistic about sustained growth in rural consumption and an improvement in urban demand. The Ministry of Finance, in its latest monthly economic review released last week, stated that I...
Post a Comment
Read more