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<ul><li>The market regulator has tightened some regulations for companies that are launching IPOs to protect investor interest and prevent volatility in stock prices.</li><li>Along with new norms for IPOs, <keyword id="35210" type="General" weightage="20" keywordseo="sebi" source="Orion">SEBI</keyword> has come up with stringent norms for winding up of a mutual fund scheme.</li><li>Check out our <a href="https://www.businessinsider.in/bi-newsletter">weekly explainers</a> on the hottest topics and <a href="https://www.businessinsider.in/newsletters_signup.cms">sign up</a> if you like them.</li></ul>India’s financial markets regulator has come up with a slew of measures to tighten the rules for companies coming out with an initial public offering (IPO) to protect investor interest and prevent volatility in such stocks. The new regulations pertain to change in lock-in period of anchor investors, utilisation of IPO proceeds, restrictions on large shareholdings and a cap on sale of promoter shares via IPO. This comes after shares of several IPOs including Paytm and Zomato facing huge volatility after anchor investors sold shares right after their 30-day lock-in period leading to a huge fall in the share price. Note that the share sale by big institutional investors shakes investors’ confidence, which can lead to hasty selling by investors. Securities and Exchange Board of India (SEBI) is trying to prevent this by increasing the lock-in period to 90 days from 30 days. Anchor investors can only sell 50% of their holding after 30 days. Anchor investors are institutional investors who are allotted shares just before an IPO opens for subscription. The market regulator has also addressed the ongoing trend of promoters selling their entire stake in the company through IPO. When promoters of companies or rather startups that are not doing well financially sell their entire stake in the company, it is bound to shake investor confidence in the IPO. From now, shareholders with over 20% stake can sell only half of its shares through the IPO. Here are the key changes put forward by SEBI: <ul><li>New regulation restricts large shareholders (with more than 20% stake) from selling their entire stake in the company. Now they can only sell half of their overall shareholding.</li><li>Companies can only use 25% of the IPO proceeds for unidentified acquisitions in the draft red herring prospectus (DRHP). This comes after companies not disclosing usage of IPO proceeds in detail.</li><li>Existing lock-in period of 30 days for anchor investors shall continue only for 50% of the holdings, the remaining 50% shares can only be sold after 90 days.</li><li>About 33% of the portion will be reserved for non-institutional investors (NIIs) with investment between ₹2 lakh - ₹10 lakh.</li><li>Remaining 66% of the portion will be reserved for NIIs with more than ₹10 lakh investment.</li><li>Winding up of mutual fund schemes would now be possible only after the consent of majority unitholders. </li></ul>SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/cryptocurrency/news/sebi-doesnt-want-mutual-funds-diving-into-crypto-assets-at-least-until-the-crypto-bill-is-finalised/articleshow/88563302.cms">India’s market watchdog warns mutual funds to stay away from crypto assets at least until regulations come in</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/startups/news/urban-company-ola-uber-are-not-the-best-places-for-gig-workers/articleshow/88561764.cms">Urban Company is not the best place for gig workers anymore and Ola, Uber are the worst</a>

SEBI comes out with stringent norms to save IPO investors from losing big money

The <keyword id="35210" type="ORGANIZATION" weightage="20" keywordseo="sebi">SEBI</keyword> has decided to relax the lock-in requirements for promoter shareholding in terms of initial public offerings (IPO) and further public offerings (<keyword id="46435" type="ORGANIZATION" weightage="20" keywordseo="FPO">FPO</keyword>). In its meeting on Friday, the SEBI board decided that the lock-in of promoters shareholding to the extent of minimum promoters contribution (20 per cent of post issue capital) shall be for a period of 18 months from the date of allotment in IPO/FPO instead of existing three years, if the object of the issue involves only offer for sale and if the object of the issue involves only raising of funds for other than for capital expenditure for a project. Further, the relaxation would be provided also in case of combined offering (fresh issue and offer for sale) if the object of the issue involves financing for other than capital expenditure for a project. In a statement, the SEBI said that in all the conditions, the promoter shareholding in excess of minimum promoter contribution shall be locked-in for a period of 6 months instead of existing 1 year. The lock-in of pre-IPO securities held by persons other than promoters shall be locked-in for a period of 6 months from the date of allotment in IPO instead of existing 1 year, it said. The period of holding of equity shares for Venture Capital Fund or Alternative Investment Fund (AIF) of category I or II or a <keyword id="5183194" type="ORGANIZATION" weightage="20" keywordseo="Foreign-Venture-Capital-Investor">Foreign Venture Capital Investor</keyword> shall be reduced to 6 months from the date of their acquisition of such equity shares instead of existing 1 year. A SEBI consultation paper dated May 11, 2021 had provided detailed rationale for the reduction in lock-in period such as demonstration of skin in the game by promoters, existence of private equity firms and AIFs several years before proposing listing, much less greenfield financing through IPOs, and others. The board also decided to approve the certain measures to reduce the disclosure requirements at the time of IPO. The definition of promoter group shall be rationalised, in case where the promoter of the issuer company is a corporate body, to exclude companies having common financial investors. The disclosure requirements in the offer documents, in respect of group companies of the issuer company, shall be rationalised to, <keyword id="11806650" type="UNKNOWN" weightage="20" keywordseo="inter-alia">inter-alia</keyword>, exclude disclosure of financials of top 5 listed/unlisted group companies. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/tech/enterprise/news/indias-first-apple-store-delayed-due-to-covid-19/articleshow/85102306.cms">Launch of India’s first Apple store delayed due to Covid-19</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/cryptocurrency/news/apple-pay-and-google-pay-are-coming-to-coinbase-allowing-users-to-buy-cryptocurrencies/articleshow/85096650.cms">Coinbase now lets you purchase crypto via Apple Pay, Google Pay option to arrive soon as well</a>

IPO/FPO: SEBI eases lock-in norms for promoter shareholding

Markets regulator <keyword id="35210" type="General" weightage="20" keywordseo="Sebi" source="Orion">SEBI</keyword> on Tuesday said it has recovered pending dues worth Rs 6.57 crore from Sahara India Real Estate Corporation, its chief <keyword id="31933" type="General" weightage="80" keywordseo="subrata-roy" source="Orion">Subrata Roy</keyword>, and others in the case pertaining to flouting norms in issuance of optionally fully convertible debentures. "In view of the payment of the amount of Rs 6.57 crore due under the certificate, the said certificate is hereby completed," the Securities and Exchange Board of India (SEBI) said in its recovery order. The amount included interest and other charges. The regulator in December ordered the attachment of bank and demat accounts of Sahara India Real Estate Corporation (now known as Sahara Commodity Services Corporation), Subrata Roy, <keyword id="1595961" type="General" weightage="50" keywordseo="ashok-roy-choudhary" source="Orion">Ashok Roy Choudhary</keyword>, Ravi Shanker Dubey and <keyword id="15891249" type="General" weightage="50" keywordseo="vandana-bharrgava" source="Orion">Vandana Bharrgava</keyword> to recover Rs 6.42 crore for violating regulatory norms in the issuance of OFCDs (Optionally Fully Convertible Debentures). This amount included interest, all costs, charges and expenses. The recovery proceedings were initiated against these entities after they failed to pay Rs 6 crore fine imposed on them by SEBI in June 2022. The case relates to the issuance of OFCDs by Sahara India Real Estate Corporation and Sahara Housing Investment Corporation during 2008-09. The companies raised money through the public issue of securities by issuing OFCDs without following the various procedures intended to protect the interest of the investors, in respect of public issues, prescribed under the norms. According to SEBI, the subscription towards the OFCDs was solicited by the two companies from the general public throughout the country, without adequately informing them about the risks involved in the instruments. The issuance was allegedly done in contravention of the provisions of the SEBI's ICDR (Issue of Capital and Disclosure Requirements) Regulations and PFUTP (Prohibition of Fraudulent and Unfair Trade Practices). SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/science/news/sky-gazers-in-for-celestial-treat-tonight-with-5-planets-forming-an-arc/articleshow/99063586.cms">Sky gazers in for celestial treat tonight with 5 planets forming an arc</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/stock-market/news/electronic-manufacturing-services-firm-avalon-technologies-865-crore-ipo-to-open-on-april-3/articleshow/99063995.cms">Electronic manufacturing services firm Avalon Technologies’ ₹865 crore IPO to open on April 3</a>

SEBI recovers dues worth ₹6.57 crore from Sahara Group firms, Subrata Roy & others

The <keyword id="6354977" type="General" weightage="50" keywordseo="supreme-court" source="Orion">Supreme Court</keyword> will hear SEBIs petition, in an open court, seeking review of its August 5 judgment, which directed the market regulator to share certain documents with Reliance Industries Limited (RIL). A bench headed by Chief Justice U.U. Lalit and comprising Justices J.K. Maheshwari and Hima Kohli said: "Considering the facts and circumstances on record and the submissions advanced in the review petition, we deem it appropriate to allow application for listing of the instant petition in open court. Let this review petition be listed in court on October 12, 2022." <keyword id="35210" type="General" weightage="20" keywordseo="SEBI" source="Orion">SEBI</keyword> has refused to entertain RIL's request to share the privileged documents on the grounds that under the Sebi (Settlement Proceedings) Regulations, the accused company has no right to seek information from it. The <keyword id="6356229" type="General" weightage="80" keywordseo="apex-court" source="Orion">apex court</keyword>, in its judgement, had rejected this stand of the market regulator. RIL had claimed that documents will exonerate it and its promoters from criminal prosecution initiated in a case related to the alleged irregularities in acquisition of its own shares between 1994 and 2000. Last week, a bench headed by Justice Sanjiv Khanna had recused from hearing RIL's petition seeking to initiate contempt proceedings against SEBI for failing to provide certain documents to the company. On August 5, a bench led by then Chief Justice N.V. Ramana had said: "The approach of SEBI, in failing to disclose the documents, also raises concerns of transparency and fair trial. Opaqueness only propagates prejudice and partiality. Opaqueness is antithetical to transparency." The top court had said the market regulator should show fairness and furnish documents sought by RIL, and SEBI has a duty to act fairly, while conducting proceedings or initiating any action against the parties. RIL filed a contempt petition as SEBI has not shared three documents -- the two legal opinions by former apex court judge B.N. Srikrishna and former ICAI president Y.H. Malegam's report which examined the irregularities. The company claimed SEBI cannot continue to resist the production of these documents and it had also sent a notice to the regulator saying if documents were not received by August 18, then it will establish that SEBI does not want to comply with the apex court's judgment. In 2002, Chartered Accountant S. Gurumurthy filed a complaint with SEBI alleging irregularities by RIL, its associate companies and their directors/promoters, including <keyword id="3820" type="General" weightage="80" keywordseo="mukesh-ambani" source="Orion">Mukesh Ambani</keyword> and his wife, Nita; <keyword id="9171" type="General" weightage="80" keywordseo="anil-ambani" source="Orion">Anil Ambani</keyword> and his wife, Tina; and 98 others. The complaint cited the issue of two preferential placement of non-convertible debentures in 1994. SEBI had alleged that RIL along with Reliance Petroleum had circuitously funded the acquisition of its own shares in violation of the Sections 77 and 77A of the Companies Act, 1956. SEE ALSO: <a href="https://www.businessinsider.in/stock-market/markets/news/sebi-tightens-disclosure-norms-for-ipo-brings-mutual-fund-transactions-under-the-gambit-of-insider-trading-rules/articleshow/94577801.cms">SEBI tightens disclosure norms for IPOs, brings mutual fund transactions under the gambit of insider trading rules</a> <a href="https://www.businessinsider.in/tech/news/jio-will-launch-5g-for-the-entire-country-by-december-2023-mukesh-ambani/articleshow/94579338.cms">Jio will launch 5G for the entire country by December 2023: Mukesh Ambani</a>

SC to hear SEBI's review petition against RIL on Oct 12

Sebi on Monday ordered the attachment of bank and demat accounts of <keyword id="31906" type="General" weightage="50" keywordseo="sahara-group" source="Orion">Sahara Group</keyword> firm, its chief <keyword id="31933" type="General" weightage="100" keywordseo="subrata-roy" source="Orion">Subrata Roy</keyword> and others to recover Rs 6.42 crore for violating regulatory norms in the issuance of optionally fully convertible debentures (OFCDs). The recovery proceedings against five entities -- <keyword id="486078" type="General" weightage="50" keywordseo="sahara-india-real-estate-corporation" source="Orion">Sahara India Real Estate Corporation</keyword> (now known as Sahara Commodity Services Corporation), Subrata Roy, <keyword id="1595961" type="General" weightage="80" keywordseo="ashok-roy-choudhary" source="Orion">Ashok Roy Choudhary</keyword>, Ravi Shanker <keyword id="20551" type="General" weightage="80" keywordseo="dubey" source="Orion">Dubey</keyword> and Vandana <keyword id="15888278" type="General" weightage="80" keywordseo="bharrgava" source="Orion">Bharrgava</keyword> -- for Rs 6.42 crore, includes interest, all costs, charges and expenses, the Securities and Exchange Board of India (Sebi) said in the attachment order. In its notice, Sebi asked all banks, depositories and mutual funds not to allow any debit from accounts of Sahara India Real Estate Corp, Subrata Roy, Ashok Roy Choudhary, Dubey and Bharrgava. However, credits have been permitted. Further, the market watchdog has directed all banks to attach all accounts, including lockers, of the defaulters. The regulator, in its order in June, levied a fine totalling Rs 6 crore on Sahara India Real Estate Corp, Subrata Roy, Ashok Roy Choudhary, Dubey and Bharrgava. The case relates to the issuance of OFCDs by Sahara India Real Estate Corporation and Sahara Housing Investment Corporation during 2008-09. They raised money through the public issue of securities by issuing OFCDs without following the various procedures intended to protect the interest of the investors, in respect of public issues, prescribed under the norms, as per Sebi order. According to Sebi, the subscription towards the OFCDs was solicited by the two companies from the general public throughout the country, without adequately informing them about the risks involved in the instruments. The issuance was allegedly done in contravention of the provisions of the Sebi's ICDR (Issue of Capital and Disclosure Requirements) Regulations and PFUTP (Prohibition of Fraudulent and Unfair Trade Practices). SEE ALSO: <a href="https://www.businessinsider.in/stock-market/news/capital-intensive-cyclical-and-value-stocks-to-continue-their-outperformance/articleshow/95659482.cms">Capital-intensive, cyclical and value stocks to continue their outperformance</a> <a href="https://www.businessinsider.in/thelife/personalities/news/top-five-billionaires-in-2022-elon-musk-gautam-adani-and-bill-gates/articleshow/96509847.cms">After a round of musical chairs, Musk, Gates and Adani are among 2022’s top 5 billionaires</a> <a href="https://www.businessinsider.in/stock-market/news/sah-polymers-ipo-to-open-on-dec-30-price-band-set-at-61-65-a-share/articleshow/96514593.cms">Sah Polymers IPO to open on Dec 30, price band set at ₹61-65 a share</a>

SEBI orders attachment of bank, demat accounts of Sahara group firm, Subrata Roy and others

New Delhi, Feb 10 () Markets regulator Sebi on Monday levied a total fine of Rs 12.05 crore on Tarini International Ltd and its officials for utilising the initial public offering (IPO) proceeds for purposes other than stated in the prospectus. Additionally, they had also concealed crucial information, such as loan taken from Hind Ispat prior to the IPO, from investors. Of the total fine levied by Sebi, Rs 5.05 crore have been imposed on the firm, while its managing director Vakamulla Chandra Shekhar and whole-time director Vakamulla Anu Naidu face a fine of Rs 5 crore each for violating various market norms. The regulator carried out investigation between June 2014 and August 2014 into the IPO of equity shares issued by Tarini International and its subsequent activities related to the trading of shares. The objectives of the IPO in the prospectus were for meeting long-term working capital requirements and renovation of the registered office, among others. However, the firm did not utilise the proceeds for the mentioned objectives and diverted the funds to the group companies. Sebi noted that the firm and its officials have misappropriated the proceeds of IPO aggregating to Rs 11.71 crore and transferred it to its group entities. "It is concluded that the Noticees, by their act, have disturbed the equilibrium of securities market by not disclosing material information to investors and misappropriating IPO proceed for the purpose other than that mentioned in the prospectus," Sebi said. In March 2019, Sebi had passed directions against the firm and its officials for the same set of violations and had directed the company to recover IPO proceeds aggregating to Rs 11.7 crore and also barred them from securities market for four years from the date of completion of recovery of the diverted funds with interest. SRS HRS

Sebi levies over Rs 12 cr fine on Tarini International, officials for flouting market norms

New Delhi, Jan 15 () Two persons -- Dushyant Natwarlal Dalal and Puloma Dushyant Dalal -- have settled a probe by markets regulator Sebi after paying over Rs 76 lakh towards settlement charge for alleged involvement in the infamous IPO scam of 2003-05.
Securities and Exchange Board of India (Sebi) agreed to settle proposed adjudication proceedings in the case after it was approached by these persons with a settlement application.
They filed a settlement application proposing to settle, "without admitting the findings of fact and conclusions of law" through a settlement order, the pending adjudication proceedings initiated by the regulator for the alleged violation of the PFTUP (Prohibition of Fraudulent and Unfair Trade Practices) norms as well as non-compliance with Sebi's direction.
Besides, they made the payment of over Rs 76.66 lakh towards settlement charges as suggested by the markets watchdog.
Consequently, the regulator, through a settlement order passed on Tuesday, said, "the enforcement proceedings for the alleged defaults...are settled".
"Sebi shall not initiate any enforcement action against the applicants for the said default," it added.
The regulator, which had conducted an investigation in the matter of the alleged irregularities during the initial public offering of various scrips, had observed certain irregularities in the transactions in the shares that were issued through the IPOs during the period 2003-05, before their listings on the stock exchanges.
The two had been accused of making unlawful gains by cornering shares of various companies meant for retail investors.
Sebi, through an ad interim exparte order in April, 2006, had barred Dalals, among other entities, from the capital markets till further directions. The directions were confirmed through Sebi orders passed in September 2008 and July 2009.
Subsequently the applicants preferred an appeal before the Securities Appellate Tribunal (SAT) and subsequent civil appeal and review petitions before the Supreme Court which finally got disposed of in August 2011.
The regulator in its order said that enforcement actions, including commencing or reopening of the proceedings, could be initiated if any representation made by the persons are found to be untrue. SP BAL

IPO scam: 2 persons settle Sebi probe; pay Rs 76 lakh

Investors will soon find it easy to apply for Initial Public Offers (IPOs) as <keyword id="6357264" type="ORGANIZATION" weightage="80" keywordseo="capital-market">capital market</keyword> regulator, <keyword id="6355630" type="ORGANIZATION" weightage="80" keywordseo="Securities-and-Exchange-Board-of-India">Securities and Exchange Board of India</keyword> (<keyword id="35210" type="ORGANIZATION" weightage="80" keywordseo="sebi">SEBI</keyword>) is coming up with norms on <keyword id="2302538" type="UNKNOWN" weightage="60" keywordseo="electronic-form">electronic form</keyword> of IPOs. The e-IPOs will allow investors to subscribe to issues online without filling application forms and standing in queues, according to an ET report. 

	Moreover, the e-IPO system will reduce the total IPO investing process for investors to six days from the existing 12 days. 
 

	At present, there are various ways of submitting an application form for a public issue including applying with a cheque. This makes it difficult to reduce the post issue timelines from the 12 days from issue closure to listing and trading of shares. 
 The challenge with the current system is the time taken for clearing cheques of the retail investors. “The proposed e-IPO system is likely to do away with cheques and provide payments through NPCI (<keyword id="394949" type="CITY" weightage="80" keywordseo="National-Payments-Corporation">National Payments Corporation</keyword> of India), brokers besides the current ASBA (Application Support Blocked Amount) mechanism…," Haresh Hinduja, head-primary market, <keyword id="1869539" type="UNKNOWN" weightage="80" keywordseo="Link-Intime">Link Intime</keyword>, told the financial daily. 

	If an investor makes an application through the ASBA route, the applicant's bank account doesn't get debited until shares are allotted to him. But, the system still has some challenges.
 In 2008, the <keyword id="6378893" type="UNKNOWN" weightage="80" keywordseo="market-regulator">market regulator</keyword> had introduced the ASBA mechanism, which is mandatory for institutional and rich investors, while optional for retail investors. At present, 70% of the applications by retail investors are done through cheques. 

	In the current IPO process, implementing ASBA across the country is a challenge. For instance, if investors send ASBA forms of multiple banks, brokers find it tedious to verify all the forms with the banks and clear them within the IPO 12-day period.
 "The proposed e-IPO mechanism has allowed more entities such as depository participants and registrar and transfer agents to accept ASBA forms, besides replicating the OFS (offer for sale) model. The client will make bid application and the clearing corporation will block brokers funds. Thus the whole settlement will be through the secondary market route," CEO of <keyword id="66607" type="CITY" weightage="80" keywordseo="Kotak-securities">Kotak Securities</keyword> Kamlesh Rao told ET. 

	SEBI is also planning to reduce the size of the abridged prospectus further and make it available electronically. 
	 
	(Image: Indiatimes)

SEBI soon coming up with e-IPO norms

<ul><li>Cash management company <keyword id="194502" type="General" weightage="20" keywordseo="cms-info-systems" source="Orion">CMS Info Systems</keyword> is likely to announce its listing on exchanges on December 31.</li><li>The IPO received tepid response from investors as it was subscribed just 1.95 times.</li><li>Following this, shares of the company may not open with huge listing gains as the grey market premium is at ₹5 per share.</li></ul>The Mumbai-based cash management company CMS Info Systems is set to list its shares on exchanges on December 31. CMS Info Systems’ business includes installing, maintaining and managing assets and technology solutions on an end-to-end outsourced basis for banks under long term contracts. The initial public offering (IPO) was open for subscription from December 21 to December 23. <a href="https://www.businessinsider.in/stock-market/news/cms-info-systems-is-going-for-ipo-when-indians-are-being-pushed-to-go-cashless/articleshow/88400115.cms">CMS Info Systems IPO</a> received a tepid demand from investors as its IPO was subscribed just 1.95 times the number of shares offered in the three days of IPO bidding process. The grey market premium of the company’s shares show a little premium of ₹5 from the higher end of the price band. Moreover, the cash management company is coming up with an IPO when the government is pushing digitisation. Also, the company’s finances dipped slightly during lockdown as customers shifted some part of their transactions to digital payments. <div type="image" title="CMS Info reve 2" height="900" width="1200" msid="88576813" hostid="261"></div>So, <a href="https://www.businessinsider.in/stock-market/news/cms-info-systems-is-going-for-ipo-when-indians-are-being-pushed-to-go-cashless/articleshow/88400115.cms">the company may face a hurdle </a>in its finances once again if another wave of COVID-19 comes through. The company raised ₹1,100 crore via public issue of shares, which is a complete offer for sale by promoter Sion Investment Holdings PTE, an affiliate of Baring Private Equity Asia. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/stock-market/news/sebi-comes-out-with-stringent-norms-to-save-ipo-investors-from-losing-big-money/articleshow/88566880.cms">SEBI comes out with stringent norms to save IPO investors from losing big money</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/auto/news/best-upcoming-electric-cars-in-india-in-2022/slidelist/88565231.cms">Best upcoming electric cars in India in 2022</a>

CMS Info Systems IPO may see tepid listing as GMP at ₹5 per share

The government has appointed 10 merchant bankers including Goldman Sachs (India) Securities, Citigroup Global Markets India, and Nomura Financial Advisory and Securities India to manage the mega initial pub<keyword id="6367143" type="General" weightage="20" keywordseo="lic" source="Orion">lic</keyword> offering of country's largest insurer LIC. Other selected bankers include SBI Capital Market, JM Financial, Axis Capital, BofA Securities, JP Morgan India, ICICI Securities, and Kotak Mahindra Capital Co Ltd, a circular on the divestment department website said. "Government has finalised the book running lead managers and some other advisors for the <keyword id="8699517" type="General" weightage="20" keywordseo="ipo-of-lic" source="Orion">IPO of LIC</keyword>," DIPAM Secretary Tuhin Kanta Pandey tweeted. The disinvestment department had invited applications for the appointment of merchant bankers on July 15. Following this, 16 merchant bankers made presentations for managing listing and partial disinvestment of Life Insurance Corporation (LIC). The Department of Investment and Public Asset Management (DIPAM) is also in the process of appointing a legal adviser for the stake sale and the last date for putting bids is September 16. Actuarial firm Milliman Advisors LLP India has already been appointed to assess the embedded value of LIC ahead of the IPO, which is likely in the January-March quarter of 2022. The government is also mulling allowing foreign investors to pick up stakes in the country's largest insurer LIC. As per Sebi (Securities and Exchange Board of India) rules, foreign portfolio investors (FPI) are permitted to buy shares in a public offer. However, since the LIC Act has no provision for foreign investments, there is a need to align the proposed <keyword id="7922409" type="General" weightage="20" keywordseo="lic-ipo" source="Orion">LIC IPO</keyword> with Sebi norms regarding foreign investor participation. The Cabinet Committee on Economic Affairs had last month cleared the initial public offering proposal of Life Insurance Corp of India. The ministerial panel known as the Alternative Mechanism on strategic disinvestment will now decide on the quantum of stake to be divested by the government. "The potential size of the IPO is expected to be far larger than any precedent in Indian markets," the department had said. The listing of LIC will be crucial for the government in meeting its disinvestment target of Rs 1.75 lakh crore for 2021-22 (April-March). So far this financial year, Rs 8,368 crore has been mopped up through minority stake sales in PSU and the sale of SUUTI (Specified Undertaking of the Unit Trust of India) stake in Axis Bank. PTI JD SHW SHW

LIC IPO: Government picks 10 merchant bankers including Goldman Sachs, Citigroup Global and Nomura

(Image source- Reuters) <ul><li>A special committee appointed by the Securities and Exchange Board of India has recommended that Indian companies be allowed to directly list their shares on <keyword id="6385821" type="UNKNOWN" weightage="20" keywordseo="FOREIGN">foreign</keyword> bourses, citing the “internationalisation of capital markets”. </li><li>However, this will only extend to those countries that have information-sharing treaties with India and strong anti-money laundering regulations. </li><li>The move will likely be welcomed by India Inc as it will open a new source of capital, especially for Indian companies with a global footprint, and allow them to service their foreign currency-denominated debt in an easier manner. </li></ul>A special committee appointed by the Securities and Exchange Board of India (<keyword id="35210" type="ORGANIZATION" weightage="20" keywordseo="sebi">SEBI</keyword>) has recommended that Indian companies be allowed to directly list their shares on foreign bourses, according <a href="https://www.livemint.com/Money/kAiqcwyiYaUOYr7zUdUPWK/Sebi-panel-votes-for-overseas-listing-of-Indian-companies.html">to media reports</a>, owing to the "internationalisation" of capital markets. The move follows a <a href="https://www.livemint.com/Money/5l70fVoFY7au71RmSuPpiO/Sebi-proposes-direct-overseas-listing-of-companies.html?utm_source=scroll&amp;utm_medium=referral&amp;utm_campaign=scroll">proposal for the same </a>earlier this year from the securities regulator, after which it formed the panel to examine the implications of such a policy. Interestingly, China was cited as an example of a country whose companies have benefited from this policy, with as many as <a href="https://www.bloombergquint.com/business/sebi-panel-pitches-for-direct-listing-of-indian-companies-overseas#gs.YM3laqg">91 Chinese firms</a> listing overseas in the last five years and raising tens of billions of dollars in the process. However, the SEBI panel’s recommendation came with two conditions. Firstly, this will only extend to those countries that have information-sharing treaties with India and strong anti-money laundering regulations, as indicated by their membership of the Financial Action Task Force. In its report, the panel specified 10 countries, the likes of which include US, UK, Switzerland, Germany, Hong Kong, Japan and China, that fulfilled these requirements. Secondly, Indian companies need to comply with certain liquidity and capital requirements before being allowed to list overseas. These include a requirement that at least 10% of their paid-up capital be listed on an Indian bourse. In addition, the listing size has to be at least ₹10 billion and should have subscription guarantees from 200 investors or more. The move will likely be welcomed by India Inc as it will open a new source of capital, especially for Indian companies with a global footprint, and allow them to service their foreign currency-denominated debt in an easier manner. It will also increase brand visibility, lead to better valuations and encourage Indian companies to compete on a global scale. As per the existing policy, no <keyword id="24975" type="ORGANIZATION" weightage="20" keywordseo="company">company</keyword> that is incorporated in India is allowed to directly list their stocks overseas despite being allowed to sell debt securities on foreign exchanges. That is largely because the government has feared that this will lead to <keyword id="701527" type="PERSON" weightage="20" keywordseo="capital-flight">capital flight</keyword> and that it would hinder the growth of the domestic stock market. Hence, the only avenue available to Indian companies is the sale of depositary receipts. Similarly, foreign companies aren’t allowed to directly list their shares on Indian stock exchanges. The SEBI panel suggested a revision of this policy as well. Should the Indian government decide to implement the recommendations, it will require significant amendments not only to the Companies Act, but also to the <keyword id="88944" type="ORGANIZATION" weightage="20" keywordseo="Foreign-Exchange-Management-Act">Foreign Exchange Management Act</keyword>. SEE ALSO: <a href="https://www.businessinsider.in/indias-securities-regulator-is-forcing-rating-agencies-to-comply-with-stricter-assessment-norms-to-prevent-a-repeat-of-the-ilfs-crisis/articleshow/66616962.cms">India’s securities regulator is forcing rating agencies to comply with stricter assessment norms to prevent a repeat of the IL&amp;FS crisis</a> <a href="https://www.businessinsider.in/india-sebi-just-made-it-a-lot-cheaper-for-you-to-invest-in-mutual-funds/articleshow/65867646.cms">India, SEBI just made it a lot cheaper for you to invest in mutual funds</a> <a href="https://www.businessinsider.in/indias-securities-regulator-wants-to-develop-indias-corporate-bond-market-so-it-has-ordered-large-companies-to-raise-at-least-25-of-their-long-term-debt-from-bond-sales/articleshow/66823456.cms">India’s securities regulator wants to develop India’s corporate bond market — so it has ordered large companies to raise at least 25% of their long-term debt from bond sales</a>

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