India’s markets regulator is working to streamline the fundraising process for companies and simplifying public offer documents for investors, Chairperson Madhabi Puri Buch said on Friday.
The Securities and Exchange Board of India (SEBI) is working to merge rights issues and preferential allotments to expedite fundraising, Buch said at an event in Mumbai, adding that combining the two would cut the time companies need to raise funds by half.
In a rights issue, a company invites its current shareholders to buy additional stock at a discount. In contrast, a preferential allotment is when a company issues shares or convertible securities to a select group of investors outside its existing shareholders, not through a public offering.
If a company has received approval for a rights issue, it can it can also allocate shares preferentially to new investors if part of the issue remains unsubscribed, Buch said.
The regulator is also working to simplify public offer documents to include only relevant information and to tweak key performance indicators in listing documents to facilitate the listing of startups, she said.
Early this year, Reuters reported that the SEBI is increasing scrutiny of issue documents filed by companies going public.
The SEBI has also been working towards curbing malpractice in initial public offering subscriptions and making disclosures simpler for investors amidst a rise in initial public offerings in the Indian market.
