Sebi working to shorten time taken for FPO offers: Sinha
18 September 2014
The Securities & Exchange Board of India is preparing a discussion paper on reducing the time taken for companies selling shares through follow-on public offers (FPOs), Sebi chairman U K Sinha said on Wednesday.
''We have received representations that the FPO timeline should be reduced. We are still examining the issue and we will come out with a discussion paper. It will take some time,'' Sinha said at an event organised by industry body CII in New Delhi.
Sinha, however, said that there is no proposal to change Sebi norms for FPOs on the retail investor quota. ''If you are asking whether Sebi rules are going to be changed for FPOs, there is nothing on the plate as of now; but if an issuer wants to allocate more to retail investors, it is possible,'' he said.
''As an issuer, if you decide to have 100 per cent quota for retail investors (via FPOs), there is nothing in the SEBI law that prevents you.''
Sinha also said Sebi is working on guidelines to deal with wilful defaulters, but there is no restriction at present on such entities from raising funds from the capital market. Currently, while those declared as defaulters cannot borrow further from banks, they can access the capital markets to raise those funds. Sinha did not clarify what changes would be part of the guidelines.
The government is planning to come out with a bill in Parliament to deal with instances of wilful defaulters. Stringent action against such defaulters in terms of attachment of properties under the SARFAESI Act, changes in management and other legal action against the promoters, among others, are under consideration.