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Tuesday, September 22, 2009

Sebi allows anchor investors in IDRs

Prescribes minimum 30% reservation in IDRs for retail investors

The Securities & Exchange Board of India (Sebi) today, 22 September 2009, said it has decided to extend the facility of anchor investors to issue of Indian depository receipts (IDRs) on similar terms as applicable to public issues made by domestic companies. It has also decided that at least 30% of issue size of the IDRs will be reserved for allocation to retail individual investors.

Sebi chairman C B Bhave also announced after market hours today that the takeover laws would apply to all future issues of American Depositary Receipts (ADR) or Global Depositary Receipts (GDR) with voting rights, but would not be retrospective.

The Sebi board also tightened disclosure norms under Regulation 7 (1A) of the takeover regulations whereby acquirers holding shares/voting rights between 15-75% will be required to disclose acquisition of an additional 2% stake or divestment of 2% stake. Earlier, the disclosure norms was applicable for acquirers holding shares/voting rights between 15-55%

In another amendment to the takeover regulations, Sebi said that creeping acquisition of 5% under Regulation 11(1) would be available subject to the condition that post-acquisition, the shareholding/voting rights of the acquirer together with persons acting in concert with him, does not increase beyond 55%. However, such acquisition up to 55% under Regulation 11(1) shall not be a bar on further acquisition up to 5% as envisaged under the second proviso to Regulation 11 (2), a Sebi circular said.

Sebi also said that a listed company undergoing corporate restructuring (merger, demerger or amalgamation) under a scheme of arrangement will be required to submit an auditors' certificate to the stock exchange to the effect that the accounting treatment followed in respect of financials contained in the scheme is in compliance with all the applicable accounting standards.

Similarly, an unlisted company undergoing similar corporate restructuring and proposing to make an initial public offer will have to make disclosures in the daft prospectus.

MY COMMENTS -

It may impact on Bharti - MTN deal. Let's see how story unveils.
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