SEBI tightens buyback rules

SEBI has released new buyback norms and a number of other market friendly measures.

Under the new rules:

  • It is mandatory for companies selling shares to purchase at least 50% of the offer size. If they fail to do so, the amount in the escrow account will be forfeited, subject to a maximum of 2.5% of the total amount earmarked.
  • Companies will have to create an escrow account towards security for performance equivalent to at least 25% of the amount earmarked for buyback.
  • Companies are prohibited to come out with another buyback offer within one year from the date of closure of the preceding offer, and the promoters of the company are not allowed to execute any transaction, either on-market or off-market, during the buyback period.
  • Maximum buyback period has been reduced to 6 months from current 12 months.
  • Start-ups and SMEs (Small and Medium Enterprises) can be listed in Institutional Trading Platform (ITP) without making an Initial Public Offering (IPO). However, these companies in ITP will be able to raise capital only from investors such as Angel Investors, VCFs (Venture Capital Funds) and PEs (Private Equities). They will not be permitted to raise capital. However, they can continue to make private placements.
  • Incorporating the recommendations of the K. M. Chandrasekhar Committee on ‘Rationalisation of investment routes and monitoring of foreign portfolio investments’ to simplify the norms for foreign institutional investors, SEBI has relaxed entry rules for offshore portfolio investors to attract more foreign capital into the country at a time of currency weakness and worries over a record high current account deficit.
  • Foreign investors will now be permitted to trade in Indian stocks without any prior registration with SEBI.

Foreign Portfolio Investors: Different categories of investors like Foreign Institutional Investors (FIIs), sub-accounts (or an investment vehicle) and Qualified Foreign Investors (QFIs) have been clubbed under a new category called Foreign Portfolio Investor (or FPI).

Month: Categories: Business, Economy & Banking


India, Hungary sign pact for ‘Gas Monitoring System’

Following the MoU signed during the Vibrant Gujarat Summit-2013, for a gas monitoring system b/w Gujarat Info Petro Ltd, a subsidiary of Gujarat State Petroleum Corporation and Cason Engineering Plc, Hungary, both have inked a pact in pursuant to the same.

How would this pact help?

Cason brings with it experience in developing, manufacturing and implementing systems for gas distribution network monitoring. It will share its expertise with the Indian company to provide automation services for gas and oil companies in India. The joint technical solutions generate easy and fast accessibility to the latest leading technologies for the rapidly developing city gas distributor industry.

What are the advantages of Gas Monitoring System?

The key benefits are:

  • To provide tool to control the procurement and sales procedures of daily purchased gas volume and to provide access for stakeholders to the relevant daily business data with technology reports and alarms via Web-based applications.
  • It will also provide a pipeline monitoring system and leak detection to leading oil pipeline operators to reduce the number of accidents and incidences such as thefts and pilferages caused by third parties in the pipelines.
  • To provide solutions for disaster management and security issues of cross-country pipelines.

Month: Categories: National