Sebi outlines rejection criteria for IPOs

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SummaryCompanies whose ultimate promoters are unidentifiable, have circular transactions to build up their net worth or have a major pending litigation will face a rejection of their offer documents

Companies whose ultimate promoters are unidentifiable, have circular transactions to build up their net worth or have a major pending litigation will face a rejection of their offer documents by the Securities and Exchange Board of India (Sebi) and hence would not be able to list themselves on the stock exchanges.

The general order passed on October 9 by the Sebi chairman, UK Sinha has defined various criteria for the scrutiny of the offer documents and has outlined the criteria for its rejection.

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