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Mumbai:
The Securities and Exchange Board of India (SEBI) has made grading of initial
public offers (IPOs) mandatory for all companies beginning May 1. The
new guidelines are issued to help investors make informed decisions, SEBI said
in a statement. The
grading, to be done by the SEBI-registered credit rating agencies, would be applicable
to all IPOs for which offer documents are filed after April 30, the market regulator
said. Companies
would be required to obtain grading from at least one rating agency and disclose
the grades in the prospectus, issue advertisements and all other places where
the issuer is advertising for the IPO, SEBI said. Also,
under the new guidelines, only companies having listed history of at least one
year are allowed to make `qualified institutional placements'' (QIP). SEBI
has amended the disclosure and investor protection (DIP) guidelines to incorporate
the changes.At
present, companies with a listed history of at least six months are allowed to
make preferential allotment. To
provide more clarity with regard to promoters'' contribution, SEBI
said that securities pledged with banks or financial institutions as collateral
security will not be eligible for computation of promoter''s contribution.
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