Capital markets regulator Securities & Exchange Board of India (Sebi) has decided to introduce a fast-track mechanism for issuing securities, which would allow listed companies to raise funds more quickly. The mechanism is similar to the one prevailing in US markets that allows companies to raise millions of dollars within hours and across various markets.
Under the mechanism, lead managers can proceed with an issue or capital-raising plan of a company listed on the NSE or BSE after filing the offer document with Sebi, the regulator said in a statement. However, it added that the new mode of issuing securities would be applicable only after necessary amendments to the Sebi (Disclosure & Investor Protection) Guidelines, expected to be released shortly.
The new mechanism will benefit only those companies listed on the BSE or NSE for at least three years and have a market capitalisation of at least Rs 10,000 crore over the last one year. A top Sebi official said, ?The move is to reward companies which are really very big, and need to raise money urgently. The regulator has made an attempt to save time and cost for such companies.?
It is estimated that initially only around two dozen listed companies would benefit from the move, but more companies will increasingly qualify for such fast track fund raising. Market experts said the mechanism is likely to significantly cut both the time for raising funds as well as market uncertainty over the process of capital issue.
Sebi also said that listed companies, which meet the requirements, would be eligible for ?rationalised disclosures as well as simplified procedural requirements.
