The Securities and Exchange Board of India (Sebi) today put equity float by large-cap companies on the fast track. A new scheme called the 'fast track share issuance programme' says companies which have been listed for three years on the National Stock Exchange and the Bombay Stock Exchange, and with at least Rs 10,000 crore free-float market capitalisation, can raise funds through rights and follow-on issues without having to wait for the market regulator's clearance.
"This is a welcome move as it opens up the capital market. We assume that apart from rights and follow-on offers, issuance to qualified institutions are also covered under the fast track. This will make the market very efficient for the fund raising programmes of large companies," said Rashesh Shah, MD, Edelweiss Securities.
In 2007, 12 companies have come out with rights issues and last year, 39 companies floated such issues. On an average, clearances took three months. The new scheme was as per the recommendations of the Sebi's primary market advisory committee.
Sebi said companies will receive in principle approvals from stock exchanges, immediately after they receive the nod from shareholders for fund raising plans. The regulator said its latest decision was aimed at providing a faster and cost effective method of raising capital by listed companies.
Only 35 companies listed on BSE and NSE have a free float market cap of Rs 10,000 crore or above. The list includes Reliance Industries, ICICI Bank, Infosys Technologies, Larsen & Toubro, Bharti Airtel, HDFC, ITC, Reliance Capital, among others. Recently listed DLF and Suzlon Energy, which qualify in the market-cap criteria, will have to wait for some more time to take advantage of the new rule.
Sebi also said the listed companies that meet the requirements will be eligible for "rationalised disclosures as well as simplified procedural requirements."
Once a company's board or shareholders pass a resolution to raise necessary capital from the market, the firm will get an in principle approval from stock exchanges.
Companies, to qualify for the new regime, should need to have an "excellent track record in redressing shareholders and investors' grievances," a Sebi release, issued late in the evening, said.
"This is a welcome move as it opens up the capital market. We assume that apart from rights and follow-on offers, issuance to qualified institutions are also covered under the fast track. This will make the market very efficient for the fund raising programmes of large companies," said Rashesh Shah, MD, Edelweiss Securities.
In 2007, 12 companies have come out with rights issues and last year, 39 companies floated such issues. On an average, clearances took three months. The new scheme was as per the recommendations of the Sebi's primary market advisory committee.
Sebi said companies will receive in principle approvals from stock exchanges, immediately after they receive the nod from shareholders for fund raising plans. The regulator said its latest decision was aimed at providing a faster and cost effective method of raising capital by listed companies.
Only 35 companies listed on BSE and NSE have a free float market cap of Rs 10,000 crore or above. The list includes Reliance Industries, ICICI Bank, Infosys Technologies, Larsen & Toubro, Bharti Airtel, HDFC, ITC, Reliance Capital, among others. Recently listed DLF and Suzlon Energy, which qualify in the market-cap criteria, will have to wait for some more time to take advantage of the new rule.
Sebi also said the listed companies that meet the requirements will be eligible for "rationalised disclosures as well as simplified procedural requirements."
Once a company's board or shareholders pass a resolution to raise necessary capital from the market, the firm will get an in principle approval from stock exchanges.
Companies, to qualify for the new regime, should need to have an "excellent track record in redressing shareholders and investors' grievances," a Sebi release, issued late in the evening, said.
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