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The Securities and Exchange Board of India (SEBI) on Wednesday slashed the time period for listing of shares in public issue from existing six (T+6) days to three (T+3) days, from the date of closure of the issue.
The regulator also tightened the disclosure norms for foreign portfolio investors (FPIs). The decisions were taken in a board meeting held on Wednesday. It said the revised IPO listing timeline of T+3 days will be made applicable in two phases – voluntary for all public issues opening on or after September 1, 2023 and mandatory on or after December 1, 2023.
SEBI said the reduction in listing timeline is likely to benefit the issuers to receive their funds and allottees to receive their securities in a shorter time period.
It will help the subscribers who were not alloted shares in an initial public offering (IPO) to receive their money back quickly.
“Resources of all stakeholders like stock exchanges, banks, depositories, brokers in public issue process will be deployed for a shorter period,” the regulator said in a press release issued after its board meeting.
The tighter disclosure norms for FPIs are aimed at guarding against possible circumvention of regulations such as Minimum Public Shareholding (MPS) or disclosures under Substantial Acquisition of Shares and Takeovers Regulations.
They will also protect against possible misuse of the FPI route to circumvent the requirements of Press Note 3 (PN3), issued during Covid pandemic to check opportunistic takeovers/acquisitions of stressed Indian companies at a cheaper valuation. This came on the back of the Adani-Hindenburg row. The US-based short seller Hindenburg, in its research report, had alleged that some FPIs held a significant stake in the listed companies of the Adani Group – a claim the conglomerate has denied.
FPI holding more than 50 per cent of their Indian equity AUM (asset under management) in a single Indian corporate group, or FPIs that individually, or along with their investor group holding more than Rs 25,000 crore of equity AUM in the Indian markets will be required to make additional granular level disclosures regarding ownership, economic interest, and control, SEBI said.
The regulator has, however, exempted certain entities, including government and government-related investors, pension funds and public retail funds and corporate entities, from making additional disclosures.
The board also approved regulations that require listed entities having outstanding listed NCDs (non-convertible debentures) (as on December 31, 2023) to list their subsequent issuances of NCDs at the stock exchanges.
The new norm, which will come into effect from January 1, 2024, is aimed at facilitating transparency in price discovery of NCDs, better disclosures to investors and the market and to check possible mis-selling of unlisted bonds, SEBI said.
The markets regulator further said that the sponsor of InvIT (infrastructure investment trust)/ REIT (real estate investment trust) will be required to hold a certain minimum unitholding on a reducing scale for the entire life of the InvIT/ REIT. Presently, SEBI regulations mandate the sponsor to hold a minimum of 15 per cent units for a period of at least three years from the date of listing of units.
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