Sebi decides to reduce time taken for rights issue process to 31 days

Markets regulator Sebi on Wednesday decided to reduce the overall time taken for rights issue to 31 days from the current 55, a move aimed at making the process more efficient.

Besides, the regulator has made ASBA (Applications Supported by Blocked Amount) facility as a mandatory mode of payment for all investors applying to shares on rights basis, Sebi said in a statement issued after the board meeting.

Payment through ASBA facility is investor friendly and enables faster completion of the post issue process.

In addition, it has introduced dematerialised and trading of rights entitlements on stock exchanges.

The new norms are aimed at significantly reducing the timeline for the completion of rights issue, which will ultimately benefit the shareholders.

The regulator said shareholders holding shares in physical form will be required to provide details of demat account for credit of rights entitlements.

The Securities and Exchange Board of India (Sebi) has decided to reduce the "timeline for completion of the rights issue from the current T+55 days to T+31 days".

The markets watchdog in May issued a consultation paper on rights issue, wherein it was looking at means to streamline the process, reduce post issue timeline and methodologies associated with it.

Also, it sought to make the application and allotment process more efficient by using the banking and depository infrastructure as well as provide issuers with an efficient mechanism for raising funds.