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SEBI modifies disclosure norms for listed companies

Price for rights issue can be fixed prior to fixing record date

MUMBAI: Paving the way for listed companies to easily raise funds from the primary market, the Securities and Exchange Board of India (SEBI) on Friday amended its Disclosure and Investor Protection Guidelines.

The regulator rationalised disclosure requirements for rights issues and public issues by listed companies as information pertaining to such companies are already available.

This rationalisation is applicable to those listed companies that are regular in filing periodic returns with stock exchanges and have a comprehensive investor grievances mechanism, SEBI said in a release here.

Further, listed companies going in for a rights issue can now fix and disclose the issue price any time prior to fixing the record date in consultation with the designated stock exchange. In the case of fixed price route public issues of companies falling into the said category, the price can be fixed before filing of the prospectus with the Registrar of Companies, SEBI said.

Companies making rights issues will now be permitted to dispatch an abridged letter of offer, containing disclosures as required in the abridged prospectus.

``In order to bring uniformity to the practice of making available abridged offer documents, it has now been decided to permit an issuer company making a rights issue to dispatch an abridged letter of offer which shall contain disclosures as required to be given in the case of an abridged prospectus, '' a SEBI release said. "The issuer company shall provide the detailed letter of offer to any shareholder upon request,'' the release added.

Companies that have filed a draft offer document with full disclosures can now come out with further capital issues even before the shares pertaining to the document are listed on the bourses.

At present, a company is prohibited from making further issue of capital after filing a draft offer document with SEBI till the listing of the shares referred to in the offer document. — PTI

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