look news india
The Securities and Exchange Board of India (SEBI) has come up with a proposal to expedite the rights issue process and make the issue market friendly.
That, the requirement of filing draft documents for rights issue should be removed and companies should be allowed to complete the rights issue process without appointing a merchant banker. SEBI wants companies to complete the rights issue process without any intermediary like a merchant banker or registrar. SEBI has proposed that the role currently played by the registrar should be played by stock exchanges and depositories.
The capital market watchdog has further proposed that rights issues should show greater flexibility in terms of allocation to preferred investors. According to a consultation paper released on Tuesday under the title *Faster Rights Issue with Flexibility of Allocation to Selected Investors*, SEBI has considered removing the requirement of filing draft letter of offer (DLOF) for overview of the issue with the regulator. SEBI has proposed to implement these reforms with the aim of simplifying and expediting the fund raising process and making the process more market friendly. According to SEBI data, Rs 15,110 crore of funds were raised through rights issue in the year 2023-24. This was much less than Rs 68,972 crore raised through qualified institutional placement (QIP). Also, the amount raised through rights issue was much less than Rs 45,155 crore raised through preferential allotment. Apart from this, SEBI has also suggested making the contents of the Letter of Offer more rational. In this regard, SEBI has recommended reducing the existing terms of disclosure on issues including the purpose of the issue, price, record date and eligibility ratio.
