Mumbai - To boost fund raising from markets, regulator Sebi has decided to reduce the time to list shares on stock exchange after initial public offerings to three days from six days.
The board of Sebi on Tuesday cleared a proposal to introduce Unified Payments Interface (UPI) as an alternative payment option for retail investors buying shares in an IPO.
Further, it has approved a framework to provide promoters a say in the price offered to shareholders of companies that are planning to delist from the bourses.
Sebi chief Ajay Tyagi said the compression in post-issue timelines and the consequent early listing and trading of shares would benefit both issuers as well as investors.
"Issuers will have faster access to the capital raised thereby enhancing the ease of doing business and the investors will have early liquidity," he added.
With regard to UPI, the Securities and Exchange Board of India (Sebi) said that the mechanism would increase the efficiency of the existing system and curtail the need for manual intervention.
UPI is an instant payment system developed by the National Payments Corporation of India (NPCI). It allows instant transfer of money between any two person's bank accounts using a payment address which uniquely identifies a person's bank account.
For simplifying the process of investing in public issue for retail investors, Sebi said the use of UPI mechanism which would allow the investor to authorise blocking of funds for making an application, as is done using ASBA (Application Supported by Blocked Amount).
Currently, retail investors either invest in an IPO through bank ASBA or through broker ASBA, where the broker does the bidding and hands over the application form to the investors bank.
Under the new process, there would be no physical movement of retail investor application forms from intermediaries to Self-Certified Syndicate Banks (SCSBs).
"The modalities for implementation will be worked out in consultation with the stakeholders. The process will be implemented in a phased manner," Tyagi added.
In respect of delisting, Sebi has decided to give promoters a say in the price offered to shareholders of companies that are planning to delist from stock exchanges.
The move is aimed at plugging loopholes in the current delisting method for companies.
In case of voluntary delisting, if the price discovered through the reverse book building process is not accepted by the promoters, a counter offer can be given by the promoters.
"However, the price through the counter offer should not be less than the book value and delisting will be successful only if such counter offer is accepted by such number of public shareholders that the post offer promoter shareholding reaches at least 90 per cent," he added.
As per the existing delisting regulations, promoters of companies getting delisted compulsorily have to provide exit to the public shareholders.
However the existing regulations do not provide for any timeline for providing this exit option.
"It has been decided to amend the regulations to provide that promoters will have to give the exit to public shareholders within three months of delisting from recognized stock exchange," he added.
With regard to one per cent security deposits for public issuance of debt securities, Sebi has decided that this requirement should be done away in order to ease the cost and compliance burden on the issuer of securities.
Currently, one per cent of the amount offered for subscription to the public is required to be deposited with the stock exchanges so that complaints relating to refund of application money, allotment of securities and dispatch of certificates among others are resolved speedily.