Sebi tightens disclosure norms for IPOs
Premium- The regulator, Sebi, at its board meeting decided to relax the pricing rules for open offers with respect to disinvestment of public sector undertakings
Market regulator Securities and Exchange Board of India (Sebi) on Friday approved a slew of changes of various regulations, which includes tightening the disclosure requirements for initial public offerings (IPOs).
The regulator, Sebi, at its board meeting decided to relax the pricing rules for open offers with respect to disinvestment of public sector undertakings.
Though for IPOs, market regulator, cleared the proposal mandating the issuers to make disclosure of Key Performance Indicators (KPIs) and price per share of issuer based on past transactions and past fund to disclose the offer price based on past transactions and fund raising activities.
“Issuers shall disclose details of pricing of shares based on past transactions and past fund raising from investor," said the press release.
It has also said that the issuer companies, in addition to the audited financial numbers, also disclose their key numbers on various key performance indicators in different sections of DRHP which are not covered in the financial statements in the offer documents.
Also, companies contemplating IPOs will soon have the option to make confidential pre-filing of offer documents.
Offer for sale:
The regulatory has also given its nod to the proposed changes in the existing framework for Offer for Sale (OFS).
Sebi has removed the 10 per cent minimum shareholding requirement for non-promoter shareholders to sell shares via the offer-for-sale mechanism.
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Earlier, non-promoters having 10 percent stake in the firm and willing to offer shares of at least ₹25 crore as eligible to offer their shares through OFS.
The existing cooling off period of 12 weeks for OFS has been reduced to a range of +2weeksto +12weeks based on the liquidity of securities of such eligible companies
The cooling period reduced to a range of plus, -2 weeks to plus, -12 weeks based on liquidity of securities of such eligible companies from the earlier cooling off period of plus, -12 weeks.
OFS mechanism has been made available to unit holders/sellers of listed REITs / InvITs to offer their holdings.
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