SEBI doubles IPO limit for retail investor to Rs2 lakh; places curbs on preferential issues
25 Oct 2010
The Securities and Exchange Board of India (SEBI) today announced an increase in investment limit for retail investors in initial public offers (IPOs) and follow-on offers (FPOs) to Rs2 lakh per issue from the current Rs1 lakh.
The retail investor quota in public offers will, however, remain unchanged, SEBI said in a release.
The SEBI board, which discussed issues like preferential allotment to promoters and the takeover regulations among other issues, also decided to place stringent conditions on allocation of preferential shares or warrants to promoters.
Companies cannot issue preferential shares or warrants to promoters if they have sold shares in past six months or if they have failed to convert the warrants in the previous one year, SEBI said.
SEBI also came out with guidelines for insurance companies that are looking to hit the capital market.
The SEBI board noted that the SEBI (ICDR) Regulations, 2009, which are sector neutral, would also apply to insurance companies. The board also noted and approved the recommendations of SEBI committee on disclosures and accounting standards (SCODA) for the following additional disclosures, having regard to the specific nature of insurance companies:
Disclosure of risk factors specific to insurance companies; broad headings under which an overview of the insurance industry shall be disclosed; other disclosures specific to insurance companies; formats for disclosure of financial information as specified by IRDA; and glossary of terms used in the insurance sector.
SEBI also approved amendments to SEBI (ICDR) Regulations, 2009, viz., exemption from appointment of monitoring agency and disclosure of disclaimer clause of IRDA in the offer documents of insurance companies.
The guidelines were issued in consultation with the Insurance Regulatory and Development Authority (IRDA). The two have been working together for the framework to get life insurance companies to raise funds from the market and list in the capital markets and this framework is more or less ready.
