Mumbai: The capital markets regulator on Monday halved the minimum market value required by listed firms seeking to make follow-on offerings to Rs50 billion ($1.1 billion), which could push more firms to sell shares.
Indian firms have raised $17 billion in share sales so far this year, as they take advantage of this year’s stock market rally of abut 70%, and a clutch of firms have filed regulatory applications to raise more than $10 billion.
Last week, the government said all profitable, listed state firms must have at least 10% of their shares in public hands, boosting hopes for offerings from several government-run firms.
The new rules for follow-on public offerings applied to all listed firms, Securities and Exchange Board of India (Sebi) chairman CB Bhave told reporters.
“This is to facilitate fast-track issuance in case of follow-on public offers, and more companies can access funds from the capital market,” he said.
Sebi introduced fast-track issues in November 2007 to enable existing listed firms that regularly made required disclosures to raise funds from the primary market more easily.
Sebi on Monday also decided to introduce an auction-based method of book building for follow-on public offers, in which buyers will be free to bid at any price above the floor price.
Bhave said this would be applicable only to institutional buyers, and not retail investors.