The Malegam panel on disclosure norms for dotcom companies is debating whether these companies should derive certain portion of their revenues from Internet and related business in order to be classifed as an Internet company.

At present there has been different views within the group on classification of a dotcom company as there are some companies which are exclusively getting revenues from advertisement on their website and e-commerce like Rediff.com, while there are companies like Satyam Infoway with revenues from their websites as well as from subscription to their Internet services. There is another set of companies which have their revenues from Internet-related business as well as from pure manufacturing but the market value of the Internet or dotcom division is high compared with their overall revenues.

Sebi member JR Varma told The Financial Express that "the group has discussed the various issues pertaining to the Internet or dotcom companies and whether there should be clear classification of a dotcom based on the business model". Dr Varma said there had also been discussions within the group whether there should be a separate set of disclosure norms for these companies or if they could also be brought under the existing IPO guidelines.

The group is likely to finalise the guidelines for dotcom companies by the end of this month or beginning of November.In addition, there have been suggestions that the current guidelines for IPOs be modified taking into consideration the dotcom companies and that a common set of rules be evolved.

In the past Sebi had modified some of the IPO norms for companies from the ICE sectors and this had led to a mushrooming of public issues from small companies, especially from the infotech sector.

Under the modified rules, companies having at least 75 per cent of their revenues from any of these three sectors can come out with a public issue with a minimum of 10 per cent of the registered capital compared with 25 per cent for companies from other sectors.