Sebi relaxes pricing norms for preferential issues of listed companies

The new pricing formula for allotment of shares under the preferential issue will be higher of the average 12-week price or 2-week price.

The Securities and Exchange Board of India (Sebi) on Thursday relaxed the pricing norms for preferential issuances to ease the capital-raising process for listed companies.

The new pricing formula will enable the issuance of new shares at recent stock prices. A lot of market participants had approached Sebi, saying the discovered price under the earlier formula was too high and was discouraging promoters and other investors from infusing more capital into the firm.

Sebi, however, has said the shares issued under the new pricing norms will be locked in for three years and the pricing relaxation will be valid for issuances made