Sebi notifies norms on shelf prospectus for debt securities

Market regulator Sebi today notified new norms which allow listed entities, including non-banking financial institutions and issuers authorised by CBDT, to file shelf prospectus for public issuance of debt securities.
A shelf-prospectus enables companies to issue corporate bonds utilising the same documents more than once, which will help cut costs and save time.
As per the new norms, the shelf prospectus for issuance of non-convertible debt securities can be filed by non-banking finance companies, including infrastructure debt funds (IDFCs) as well as public sector financial institutions.
Besides, the regulator has extended the facility to issuers authorised by central board of direct taxes (CBDT)to make public issue of tax free secured bonds.

To avoid fragmentation of the issues, which will affect the floating stock and thereby liquidity, Sebi has said that "not more than four issuances shall be made through a single shelf prospectus".
"The issuer filing a shelf prospectus shall file a copy of an information memorandum with the recognised stock exchanges and the board, immediately on filing the same with the Registrar," it added.

Moreover, Sebi has said NBFCs and other listed issuers would be eligible for filing shelf prospectus only if meet certain criteria.
These include having a net worth of at least Rs 500 crore, the securities issued under the shelf prospectus have been assigned a rating of not less than "AA-" category or equivalent by a credit rating agency registered with Sebi.

The entities also have no regulatory action is pending against them before Sebi, Reserve Bank of India or National Housing Bank, among others.