Business Daily from THE HINDU group of publications
Wednesday, Jul 11, 2007
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Business Daily from THE HINDU group of publications Wednesday, Jul 11, 2007 ePaper |
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IPOs Markets - Regulatory Bodies & Rulings Industry & Economy - Infrastructure
According to new guidelines, for a government company in the infrastructure sector the minimum holding requirement of pre-issue capital will not be applicable
Our Bureau Mumbai, July 10 Securities and Exchange Board of India has amended the Disclosure and Investor Protection Guidelines, 2000 to help government companies, statutory authorities or any special purpose vehicle engaged in infrastructure sector to raise funds in the Indian primary market through initial public offerings (IPO). SEBI defines companies in the infrastructure sector as government companies that provide services in the areas of transportation, agriculture, water management, telecommunication, industrial, commercial and social development and maintenance, power, petroleum and natural gas, housing, and other miscellaneous facilities. As per the amendments, the existing clause of fixing the face value of an equity share below Rs 10 but not less than Re 1 for an issue price of Rs 500 or more, and the requirement of fixing the face value of a share at Rs 10 if the issue price is less than Rs 500 will not apply to any government company or statutory authority in the infrastructure sector when it makes a public or rights issue. Promoters’ contribution
Further amendments in the clause state that securities acquired by the promoters during the preceding year, at a price lower than that at which equity is being offered to the public, shall not be eligible for computation of promoters’ contribution. Further, if the shares for which the difference between the offer price and the issue price is brought in by the promoters, it shall be considered eligible subject to the issuer company. A government company in the infrastructure sector may not adhere to the mentioned requirement. Also, for a government company in the infrastructure sector that goes in for sale of equity shares, the minimum holding requirement of pre-issue capital will not be applicable, the SEBI circular said. As per the original guidelines for all companies, the pre-issue share capital should be held for at least one year at the time of filing the draft offer document with the Board and being offered to the public through offer for sale. The circular also said that an infrastructure company or a government company in the infrastructure sector shall not adhere to the proviso that in the case of a public issue by an unlisted company, the net offer to the public shall be at least 10-25 per cent of the post-issue capital. Also, in a public issue by a listed company, the net offer to the public shall be at least 10-25 per cent of the issue size.
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