Sebi moots big changes to preferential allotment norms on pricing, lock-in

Regulator says any preferential issue causing change in control or allotment of more than 5% stake will require a valuation report from a registered valuer

Sebi on Friday proposed large-scale changes to the framework governing preferential allotments—issue of shares, warrants or convertibles to promoters or large investors on a privately-placed basis.

In a discussion paper issued on Friday, Sebi has sought to tweak the pricing formula, lock-in requirements and valuation methodology for preferential issues.

Under the current framework, the pricing of shares has to be a higher of average of the weekly high and low of the volume weighted average price (VWAP) during the 26 weeks preceding date of issuance and the average of the weekly high and low of VWAP during the two weeks