The Securities and Exchange Board of India (Sebi) today said the shelf placement document would have a validity of 180 days for listing of debt instruments issued through private placement. Earlier, companies used to file a fresh shelf document for listing of debt instruments after every issuance.
“In case of frequent issues through private placement, an enabling clause for a shelf placement document with a validity of 180 days has been provided,” said Sebi in a release today. As a result, now companies would be able to use the same shelf document for issuances with same terms and conditions. “This will help reduce procedures and paper work to some extent as most of the contents remain the same. Only the term sheet changes for successive issues,” said a merchant banker.
The corporate debt market in India is limited to top-rated issuers presently. Non-banking finance companies like Rural Electrification Corp, Power Finance Corp, etc and a number of gold finance companies tap the debt market on a regular basis. Other amendments to the debt listing norms include additional disclosures and standardisation of reporting formats. Companies will now require to provide details of corporate guarantee and commercial papers issued if any, details of default and delay in payment on borrowings over last five years, whether debt security is backed by guarantee or letter of comfort and copy of consent letter from debenture trustee.
The formats for presenting financial information, history of equity share capital details, term sheet with details of covenants on security creation, default in payment and delay in listing have been standardised.