SEBI eases fund-raising norms for firms

As part of its attempts to make it easier for listed companies to raise funds in the current volatile scenario, the Securities and Exchange Board of India (SEBI) has allowed listed companies to raise funds at shorter intervals while also giving promoters the go-ahead to increase their stakes by a higher quantum without triggering an open offer.
As per a gazette notification, the capital markets regulator has allowed companies to make two qualified institutional placements (QIPs) with a gap of just two weeks between them.
This is a significant move as the earlier regulations mandated a minimum gap of six months between two such issuances.
In another important amendment, the regulator has said that promoters can increase their stakes in their companies through preferential allotments by up to 10% without triggering an open offer.
The cap was earlier set at 5%.
The regulator has, however, allowed this relaxation only for the current financial year.
Analysts said the twin moves would help in enhancing liquidity in the market as companies would be able to better time fund-raising while promoters could also acquire shares at a time when valuations were quite low compared with the historic highs.

Boosting liquidity

Relaxation from the takeover code could be a good opportunity for promoters who are looking to increase their stakes at attractive valuations, given the current market sentiments.
In April, the capital markets regulator relaxed certain regulatory requirements related to rights issues and initial public offerings (IPOs) to make it easier for companies to raise funds at a time when the COVID-19 pandemic had made the secondary markets increasingly volatile.
The watchdog said any listed entity with a market capitalisation of at least 100 crores could use the fast-track route for a rights issue.
Earlier, the norm was 250 crore for such offerings.
Further, any company that had been listed for 18 months was permitted to raise funds through a fast-track rights issue. The eligibility had earlier been set at three years.
Also, the minimum subscription requirement to make an issue successful was lowered from the earlier 90% of the offer size to 75%.

What Is a Qualified Institutional Placement (QIP)

A qualified institutional placement (QIP) is, at its core, a way for listed companies to raise capital, without having to submit legal paperwork to market regulators.
It is common in India and other southeast Asian countries.
The Securities and Exchange Board of India (SEBI) created the rule to avoid the dependence of companies on foreign capital resources.
QIPs are helpful for a couple of reasons.
Their use saves time as the issuance of QIPs and access to capital is far quicker than through an FPO.
The speed is because QIPs have far fewer legal rules and regulations to follow, making them much more cost-efficient.
Further, there are fewer legal fees, and there is no cost of listing overseas.

Source: TH

Join Our Telegram

Land use Change

RBI to tighten rules for home finance firms

India’s Indo-Pacific Oceans Initiative (IPOI) UPSC GS-2 INDO PACIFIC – IR/PSIR

20 Nov, 25
SHARE

India’s Indo-Pacific Oceans Initiative (IPOI) UPSC GS-2 INDO PACIFIC – IR/PSIR IPOI is India’s open, voluntary and non-treaty-based maritime initiative for building a free, open, inclusive and rules-based Indo-Pacific through practical cooperation. Why in News? India’s Indo-Pacific Oceans Ini

AI Impact Summit 2026 UPSC GS-3 S&T PT-MAINS

19 May, 26
SHARE

AI Impact Summit 2026 UPSC GS-3 S&T PT-MAINS The India-AI Impact Summit 2026 positioned India as a Global South leader by shifting global AI debate from only AI safety and regulation to AI for development, inclusion and real-world impact. Why in News? India hosted the India-AI Impact Summit 2026 at B

Hong Kong Convention for Safe Ship Recycling UPSC GS-3 ENVIRONMENT PT-MAINS

27 Jun, 25
SHARE

Hong Kong Convention for Safe Ship Recycling UPSC GS-3 ENVIRONMENT PT-MAINS The Hong Kong International Convention, 2009 is an IMO treaty that ensures ships are recycled safely without unnecessary risk to human health, worker safety and the environment. Why in News? The Hong Kong Convention entered into force on 26 June 2

LeadIT 2.0: Leadership Group for Industry Transition COP28 UPSC GS-2 IR GS-3 S&T

14 Nov, 23
SHARE

LeadIT 2.0: Leadership Group for Industry Transition UPSC GS-2 IR GS-3 S&T LeadIT 2.0 is the second phase of the India-Sweden-led global initiative to support low-carbon transition in hard-to-abate industrial sectors. Why in News? The second phase of LeadIT was announced at the LeadIT Summit 2023, ho

India-EFTA Trade and Economic Partnership Agreement UPSC GS-2 IR/PSIR

03 Sep, 25
SHARE

India-EFTA Trade and Economic Partnership Agreement UPSC GS-2 IR/PSIR The India-EFTA TEPA is a comprehensive trade pact between India and four non-EU European countries — Iceland, Liechtenstein, Norway and Switzerland — aimed at boosting trade, investment, jobs, services, technology and supply-chain resilience. Wh