Sebi cuts timeline for rights issue

Issue of AIFs circumventing norms resolved, says Ananth Narayan

- FE BUREAU

SEBI ON TUESDAY reduced the processing time for a rights issue of equity shares to 23 working days from the current average time of 317 days, in a bid to make it a preferred route of fundraising.

Separately, the regulator has provided flexibility of allotment to specific investors in the rights issue and discontinued the current requirement of filing draft offer with it for issuance of its observation. Instead, it will be filed with the stock exchanges for their in-principle approval, as the entity is already a listed one. The moves will facilitate the ease of doing business.

Under the framework, rights issues will be completed within 23 working days from the date of board of directors of the issuer approving the issue, Sebi said. This mechanism would be even faster than the preferential allotment route that takes 40 working days. Sebi said rights issues will be kept open for subscription for a minimum period of seven days and for a maximum period of 30 days.