NEW DELHI: Regulator Sebi Wednesday proposed changes to share buyback norms for companies having non-banking financial companies and housing finance companies as subsidiaries. A discussion paper has been issued to seek suggestions relating to review of conditions for buyback of securities. Sebi's Primary Markets Advisory Committee (PMAC) had made certain recommendations with respect to buyback of shares for companies having Non-Banking Financial Companies (NBFCs) and Housing Finance Companies (HFCs).
According to the discussion paper, the committee has proposed that post buyback debt to capital and free reserves ratio of 2:1 should be considered on consolidated basis, excluding subsidiaries that are regulated and have AAA ratings.
Such subsidiaries should not have a debt to equity ratio of more than 5:1 on standalone basis, as per the discussion paper.
"Further, PMAC suggested that infrastructure companies are not separately regulated and have better use of money and therefore no such exclusion may be considered for infrastructure companies," Sebi said.
Comments have been sought on the discussion paper till June 12.