Now, Sebi joins fight against bad loans

The Securities and Exchange Board of India (Sebi) on Wednesday joined the fight against bad loans by providing several relaxations to the rules of share acquisitions in the case of distressed companies.The market regulator said an investor gaining control of a stressed company in the listed space would not have to make an open offer. Also, Sebi’s pricing formula for acquisition of shares would not be applicable in such cases.Currently, these exemptions are only given to banks, but the restructuring process hits a roadblock if the bank further decides to divest to a new investor.“The Sebi board has taken decisions to facilitate the resolution of distressed assets, thereby contributing to the efforts made by the RBI (Reserve Bank of India) and the Insolvency and Bankruptcy Board of India,” said Ajay Tyagi, chairman, Sebi. Commodity Trading Tips

At the board meeting, Sebi took other key decisions such as banning participatory notes (p-notes) from taking naked positions in the derivatives segment, and easing the entry process for foreign portfolio investors (FPIs). It also removed the one-year lock-in requirement for private equity investors registered as alternative investment funds (AIFs) in initial public offerings (IPOs). Sebi said acquisitions of stressed companies approved by the National Company Law Tribunal (NCLT) under the Insolvency and Bankruptcy Code (IBC) would be given exemptions from an open offer. Under the current rules, any acquirer buying 25 per cent in a listed company has to make an open offer to acquire another 26 per cent. Nifty Trading Tips