Mumbai: In a move to boost the primary market for corporate bonds in the country, the Securities Exchange Board of India (SEBI) Monday relaxed the guidelines for companies raising funds through issue of bonds.
The market regulator has relaxed certain requirements enlisted in the (Disclosure and Investor Protection) Guidelines 2000, for the issue of bonds by corporates in the country.
The requirement for corporates to obtain credit ratings from two agencies has been relaxed to one credit agency. This relaxation would reduce the cost of issuance of debt instruments, SEBI said.
It has also decided to allow issue of bonds even which are below the investment grade.
“It has been decided to allow the issuance of bonds, which are below investment grade, to the public to suit the risk or return appetite of investors,” the SEBI circular said.
In a disclosure based regime, it should be left to the investor to decide whether or not to invest in a non-investment grade debt instrument, it added.
The regulator has also decided on removal of structural restrictions currently placed on debt instruments such as those on maturity, put or call option on conversion among others.
A move which would help the issuers to structure the instruments to suit their requirements making the process flexible for them, it said.