'Relaxation of FPOs will be applicable for all issues'

The central government's reported decision asking the market regulator SEBI to relax the norms for follow-on public offerings will be applicable for all, say industry officials.

According to media reports, the central government has asked Securities and Exchange Board of India (SEBI) to relax the rules for FPOs so as to attract more retail investors for the disinvestment programme.

The relaxation could be in the form of disclosure norms and automatic approvals as it is an FPO and the company is already a listed entity.

"I feel the relaxation will be not only for the government's disinvestment activity but for all FPOs in general," S. Subramanian, managing director and head investment banking at Axis Capital Ltd, told IANS.

He said FPOs are for retail investors and there will be sufficient protection for them.

According to the reports, most of the disinvestments were done through the offer for sale (OFS) mechanism had seen little participation from the retail investor community.

For the retail investors, the FPOs are bit attractive as the issue price is within a band whereas in the case of OFS, there is only the floor price.

According to Subramanian, the market regulator has revised its norms in the past as well and it is a continuous process.