Our Bureau

Mumbai May 29

The recent guidelines issued by SEBI for Qualified Institutional Placement (QIP) has attracted another company, Videocon Industries Ltd (VIL), to raise funds from the domestic market through this route.

The company is planning to go in for placement of equity shares or securities other than warrants, which are convertible into or exchangeable with equity shares, under the May 8 guidelines issued by the regulator for QIP.

Approval

In this connection, the company has informed the BSE that an Extra Ordinary General Meeting of the members will be held on June 26 to seek approval for placement of equity shares or securities under the recent SEBI guidelines.

In order to make Indian markets more competitive, SEBI had decided to introduce an additional mode for listed companies to raise funds from domestic market in the form of QIP. Securities that can be issued through QIP are equity shares or any securities other than warrants, which are convertible into or exchangeable with equity shares at a later date.

Guidelines

As per the guidelines, the specified securities can be issued only to Qualified Institutional Buyers, who should not be the promoters or related to promoters of the issuer either directly or indirectly. Further, the floor price of the specified securities should be determined on a basis similar to that for GDR or FCCB issues and would be subject to adjustment in case of corporate actions such as stock splits and rights issue.

(This article was published in the Business Line print edition dated May 30, 2006)
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