Page 2 - Debt Securities

Sebi to introduce fast track concept for public issuance of debt securities

To deepen the bond market, Sebi is looking to introduce the concept of 'fast track' public issuance for debt securities and further reduce the face value of debt securities, including non-convertible debentures, issued on a private placement basis to Rs 10,000 from Rs 1 lakh at present. If implemented, the move would also promote ease of doing business. "The main intention of a fast track public issuance of debt securities is to facilitate frequent issuers with a consistent track record, to make public issues of debt securities with reduced time, cost and effort," Sebi said in its consultation paper. To further enhance the participation of the non-institutional investors in the corporate bond market, Sebi has "proposed to permit issuers to launch NCDs (non-convertible debentures) or NCRPS (non-convertible redeemable preference shares) with the face value of Rs 10,000". However, in such cases, the issuer should appoint a merchant banker who would carry out due diligence for issuance

Sebi eases access to unclaimed funds in REITs, InvITs, debt securities

Capital markets regulator Sebi on Wednesday came out with detailed procedures for dealing with unclaimed funds of investors lying with entities having listed non-convertible securities, REITs and InvITs. Also, the regulator has put in place a manner of claiming such unclaimed amounts by investors. The new framework will come into effect from March 1, 2024, the Securities and Exchange Board of India (Sebi) said in three separate circulars. The move is aimed at prescribing a uniform process of claim for such unclaimed funds in a streamlined manner for the ease and convenience of investors. This came after the board of Sebi in September approved amendments to rules about the IPEF (Investor Protection and Education Fund) disclosure, real estate investment trusts (REITs), and infrastructure investment trusts (InvITs). Going by circulars, Sebi has defined the manner of handling the unclaimed amounts lying with REITs, InvITs, and in the escrow accounts of the listed entities (which are n

Sebi eases norms for borrowing for large corporates through debt securities

Capital markets regulator Sebi on Thursday relaxed norms for borrowings through the issuance of debt securities large corporates to meet their financing needs. Under the rule, entities qualified as large corporates are required to meet 25 per cent mandatory borrowing from bonds. Large corporates are those that have an outstanding long-term borrowing of at least Rs 100 crore with a credit rating of 'AA and above' and have their debt securities listed on a stock exchange. Under the new framework, Sebi has introduced incentives for large corporates in case of surplus in the requisite borrowings and moderated disincentives if they fail to raise at least 25 per cent of their incremental borrowings through debt securities. In case of shortfall or surplus by way of issuance of debt securities, additional or lower contributions, respectively, to the core Settlement Guarantee Fund (SGF) of the Limited Purpose Clearing Corporation (LPCC) needs to be made by the LC, according to the ...

Sebi brings new format for abridged prospectus for debt securities

Capital markets regulator Sebi on Monday came out with a new format for abridged prospectus for public issuance of non-convertible debt securities wherein critical information will be provided on the front page of the offer document. Besides, the issuer or merchant bankers concerned should include a Quick Response (QR) code so that the prospectus can be accessed on scanning the code. The format has been revised to further simplify and provide greater clarity and consistency in the disclosures across various documents, the Securities and Exchange Board of India (Sebi) said in a circular. The new format will be applicable for all public issues opening on or after October 1, 2023. Under the rules, no form of application for the purchase of securities of a company will be issued unless such a form is accompanied by an abridged prospectus. As per the revised format, an issuer will have to disclose the name as a type of instrument, base size, face value, the option to retain ...

Sebi notifies stricter delisting rules for non-convertible debt securities

With an aim to protect investors' interest, Sebi has notified a new framework prohibiting listed entities, with more than 200 non-QIB (qualified institutional buyer) holders of non-convertible debt securities, from delisting voluntarily. Under the new rule, the listed entity will have to obtain permission from all holders of non-convertible debt securities within 15 working days of receiving the notification of delisting. The present rule allows entities to delist by giving a prior intimation to the stock exchange about the meeting of the board of directors, where the proposal for a voluntary delisting is considered. Unlike equity, wherein approval by a threshold majority is sufficient for approval of delisting, in the new framework, approval of 100 per cent of the debt security holders has been mandated for delisting of debt securities. This is because, unlike equity which is a perpetual instrument, listed debt securities have a finite term to maturity. In its notification issued

Regulator Sebi proposes to ease norms for borrowings by large corporates

The present norms require large corporates to raise 25 per cent of their incremental borrowings in a financial year by way of issuance of debt securities

Sebi unveils new disclosure framework for issuers of debt securities

Markets regulator Sebi has notified rules for introducing the concept of general information and key information document to avoid multiple filings of documents by issuers of debt securities. The move will promote ease of doing business for issuers. A General Information Document (GID) will contain the information and disclosures specified in the common schedule and will be filed with the stock exchanges at the time of the first issuance. The GID will have a validity period of one year, Sebi said in a notification. Thereafter, for subsequent private placements of non-convertible securities or commercial papers within the validity period, only a Key Information Document (KID) will be required to be filed with the stock exchanges, containing material changes. KID includes financial information, if such information provided in the general information document is more than six months old. To begin with, Sebi said the concept would be made applicable on a 'comply or explain' basis til

Sebi provides clarity on director nomination by debenture trustees

After receiving representations, markets regulator Sebi on Tuesday provided clarity on the requirements for appointment of directors by entities that have listed their debt securities. Under Sebi norms pertaining to listing of non-convertible securities, an entity registered under the Companies Act, 2013 has to ensure that a person nominated by the debenture trustee is appointed as a director. While this obligation exists for issuers that are companies under the Companies Act, 2013, there is no similar obligation for issuers that are not companies. In this regard, representations have been received from debenture trustees, the regulator said in a circular. Against this backdrop, Sebi noted that the appointment of a director including nominee director is driven by the provisions of the principal document of the entity (Articles of association, in case of companies under the Companies Act, 2013). "A nominee director is a director, and therefore, except for specific provisions of law,

Sebi proposes delisting mechanism for non-convertible debt securities

Capital markets regulator Sebi has proposed a mechanism for the voluntary delisting of non-convertible debt securities. Under the mechanism, an entity should not be permitted to delist a few non-convertible debt securities while other non-convertible debt securities continue to remain listed. Accordingly, the proposed mechanism would apply to the voluntary delisting of all listed non-convertible debt securities from all or any of the recognised stock exchanges. The proposed mechanism would not be applicable to the delisting of non-convertible debt securities of a listed entity that have been delisted by the stock exchanges as a consequence of any penalty or delisted under a resolution plan approved under the IBC. Notwithstanding this, a listed entity that has more than 200 non-QIB (qualified institutional buyers) holders in any ISIN (International Securities Identification Number) relating to listed non-convertible debt securities, should not be able to voluntarily delist any of it

Sebi prescribes additional disclosures for issuing transition bonds

Disclosures on implementation and utilisation of funds aim to ensure there is no misallocation

APSEZ board to consider partial buyback of debt securities on Saturday

Billionaire Gautam Adani's Adani Ports and Special Economic Zone Limited (APSEZ) on Wednesday said its board will meet on Saturday to consider first and a partial buyback of certain of its debt securities, either denominated in rupee or US dollar in the current financial year. "... a meeting of the Board of Directors of Adani Ports and Special Economic Zone Limited is scheduled on Saturday, April 22, 2023, to consider first and a partial buyback of certain of its debt securities, either denominated in INR or USD, in this financial year, subject to market conditions," the company said in a BSE filing. Adani group has been under pressure after the US short-seller Hindenburg Research on January 24 accused it of accounting fraud and stock manipulation, allegations that the conglomerate has denied as "malicious" and "baseless". Earlier this month, APSEZ had reported a 9 per cent growth in cargo handling at seaports it operates for the fiscal ended March 31. At 339 million tonne, this is

Proposed tax rejig may trigger outflow from debt MFs into equity: Analysts

The proposed amendment will also affect gold funds and international funds, analysts said, who believe that bank FDs will become more attractive

UCO Bank planning to raise up to Rs 1,000 cr by issuing debt securities

State-owned UCO Bank on Wednesday said it is planning to raise up to Rs 1,000 crore by issuing debt securities. The bank's board will consider the proposal for raising tier I capital in the form of additional tier I bonds in one or more tranches aggregating to Rs 1,000 crore, UCO Bank said in a regulatory filing. The board is scheduled to meet on January 3, 2023 to take up the fund raise proposal. UCO Bank stock closed at Rs 31.45 on BSE, down 2.93 per cent.

Pakistan's external debt stocks in 2021 stood at $130 billion: World Bank

The World Bank has estimated Pakistan's total external debt stocks stood at $130.433 billion by end-2021 in comparison to $115.695 by the end-2020

Sebi reduces timeline to list debt securities issued on pvt placement basis

Markets regulator Sebi on Wednesday reduced the timeline for listing of debt securities issued on a private placement basis to three days. Currently, the timeline is four days and the latest move would also expedite the availability of securities for trading by the investors. Sebi has listed out the steps involved in pre-listing and post-listing along with relevant timelines, both through Electronic Book Provider (EBP) platform and otherwise. This is to provide more clarity and standardisation in the process of issuance and listing of such securities on the private placement basis. The new guidelines would come into effect from January 1, 2023, the Securities and Exchange Board of India (Sebi) said in a circular. The time taken for listing of such securities after the closure of the issue has been reduced to three working days (T+3) as against the present requirement of 4 working days (T+4). Under the EBP mechanism, an issuer wishing to list non-convertible securities or municipal

Debt securities rules: Sebi issues circular for disclosing payment of fees

Sebi on Thursday issued a new format for disclosing details pertaining to payment of fees applicable under the issuance of debt securities rules. In July, Sebi said that market infrastructure institutions, including stock exchanges, registered intermediaries and companies that have listed or are intending to list their securities on a stock exchange have to pay 18 per cent GST on the fees charged by the regulator. This is also applicable for persons who are dealing in the securities market. The tax rate was effective from July 18. The Securities and Exchange Board of India (Sebi) has amended the chapter that deals with bank account details for payment of fees of the NCS (Issue and Listing of Non-Convertible Securities) rules, according to a circular. Under the new format, issuers who have listed and/ or propose to list non-convertible securities, stock exchanges and other entities will have to disclose to Sebi about date of remittance, amount remitted -- break-up of fee and GST ..

Sebi enhances disclosures requirements for credit rating agencies

Capital markets regulator Sebi on Friday enhanced disclosure rules for credit rating agencies (CRAs) and put in place a framework for rating withdrawal of perpetual debt securities. The move is aimed at allowing investors and other stakeholders to properly use such disclosures in a fair assessment of CRAs, the Securities and Exchange Board of India (Sebi) said in a circular. The new framework will be applicable to credit ratings of securities that are already listed or proposed to be listed on a stock exchange. In order to standardise the methodology pertaining to disclosure of a 'sharp rating action', Sebi said CRAs will have to compare two consecutive rating actions. Further, a CRA will have to disclose a sharp rating action if the rating change between two consecutive rating actions is more than or equal to three notches downward. The regulator has mandated CRAs to frame detailed guidelines on what constitutes non-cooperation by issuers, which includes non-submission of quarte

Sebi mulling framework to encourage more ETFs in debt segment: Ananta Barua

Sebi's Wholetime Member Ananta Barua said Sebi is also looking at implementing other measures as announced in the annual budget by Finance Minister Nirmala Sitharaman.

Sebi raises investment limit via UPI to Rs 5 lakh for retail investors

The new framework will be applicable to public issues of debt securities which open on or after May 1, 2022, the Securities and Exchange Board of India (Sebi) said in a circular

CreditAccess Grameen gets board approval to raise up to Rs 5k cr via debt

Microfinance lender CreditAccess Grameen on Wednesday said its board has approved a proposal to raise up to Rs 5k crore through debt securities and an additional $7.4 million by issuing masala bonds.