| The Securities and Exchange Board of India (Sebi) today eased the rules for government-owned infrastructure companies for raising funds through initial share offerings by doing away with the mandatory one-year lock-in requirement of pre-issue share placements.
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| The relaxation in norms was brought about by an amendment in the Sebi Disclosure and Investor Protection Guideline 2000, according to a circular issued today.
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| The move will help government companies such as PSUs, statutory authorities and special purpose vehicles (SPVs) set up by them to raise capital for their infrastructure development activities.
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| According to the Sebi, infrastructure sectors would include transportation, agriculture, water management, telecommunications, industrial and commercial development, power, petroleum and natural gas, housing and other segments such as mining, disaster management services, technology-related infrastructure.
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| Aviation, ports, roads, rail system and logistics have been included in the transportation sector. The agriculture sector comprises infrastructure-related storage facilities, construction relating to agro-processing projects and reservation and storage of perishable goods.
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| Currently, the Sebi rules stipulate one-year lock-in period for those who buy shares prior to an IPO by these companies.
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| However, the relaxation would allow government companies to attract more investors at higher valuations by selling shares as pre-IPO placements as the investors have an option to exit the company even on a shorter time-span.
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| The circular has also included real-estate development, including industrial parks, special economic zones, tourism and entertainment centers, educational institutions and hospitals and solid waste management systems, under infrastructure.
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| Meanwhile, the Sebi has also amended the Clause-41 of the listing agreement. Under the revised clause, listed companies are allowed to furnish either unaudited or audited quarterly and year-to-date financial results to the stock exchange within one month from the end of each quarter.
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| If companies furnish unaudited results, it should be followed with a Limited Review Report to enable investors to know the performance of the listed companies at the earliest. |
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