Sebi proposes to reduce time taken for rights issue process

Sebi Tuesday proposed reducing the overall time taken for rights issue to around 31 days as well as make the application and allotment process more efficient.

Currently, rights issue process takes 55-58 days from the time company decides to launch the issue till listing.

"... there is a need to reduce the timelines both in the pre-issue opening phase and after issue closure such that the issuer and shareholders benefit from process efficiencies," Sebi said in a discussion paper.

Besides, the regulator proposed to eliminate the requirement of giving newspaper advertisement and replacing it with intimation to the shareholders through the stock exchanges and e-mail.

The regulator said the discussion paper evaluates means to reduce time between announcement of terms of the issue and issue closing, which would help in reducing price risks.

Further, it seeks 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.

Sebi said the discussion paper is also looking at means to streamline the process, reduce post issue timeline for rights issues and methodologies associated with rights issue fund raising process.

The watchdog has