The Securities and Exchange Board of India (Sebi) has announced key amendments to the equity listing agreement. These pertain to the crucial matter of monitoring the utilisation of issue proceeds, after a company raises money from the capital market through an initial public offer. Sebi also issued ammendments for electronic filing through corporate filing and dissemination system and it has been mandated for 100 companies.
On the monitoring report, the ammmendment states that utilisation of issue proceeds filed by the monitoring agency, if appointed at the time of issue, shall be placed before the audit committee of the company. The audit committee shall then review such reports as well as the statement indicating material deviations in the utilisation of issue proceeds and make appropriate recommendations to the board of the company. Such material deviations shall be informed to the stock exchange and simultaneously, material deviations or adverse comments of the audit committee or monitoring agency shall be made public through advertisement in newspapers.
This move is expected to usher in more responsible management of capital raised from the IPO market and will bring in greater accountability for promoters, say markert experts. This comes at a time when companies raised a record Rs 45,000 crore from the IPO market. On the matter of a new portal for electronic filing through the central filing and dissemination system (CFDS), put in place jointly by BSE and NSE, Sebi has decided to mandate filing through CFDS.
