Sebi relaxes OFS norms; abolishes 25% upfront margin requirement
According to Sebi, the new rules would co-exist with the current practice of institutions submitting bids backed by at least a 25 per cent margin. Last year, Sebi allowed stock exchanges to decide on an ad hoc margin for applicants who did not want to bid with 100 per cent margin. This ad hoc margin was typically fixed at 25 per cent. Sebi has also said that the indicative price of an OFS and the order book will be visible during the trading session.
The board of the capital market regulator met in Chennai on Friday and decided on further relaxing the OFS rules to maker it easier for companies to comply with the minimum public shareholding norms wherein the promoter holding has to be reduced to 75 per cent (90 per cent in the case of state-owned entities).
While announcing the new norms, Sebi chairman UK Sinha stressed on the fact that the deadline of June 2013 for complying with the public shareholding norms is “sacrosanct” and even the government has agreed to abide by the requirements.
“I can share with you that we have received confirmation from the government that it is very keen to complete the transactions
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