SEBI proposes to reduce time for rights issue

Mumbai: The Securities and Exchange Board of India (SEBI) is looking at the possibility of reducing the time for issuance of the rights shares, its chairman C B Bhave said. 

''We are hoping that we can bring it down further but we need to expand the processes also,'' Bhave told reporters in Chennai.

He said the regulator is also examining  a proposal of issue of rights shares through the demat process.

''Our hope is that in the next few months, we will complete our examination of this issue, maybe put it on our website to get people's comments and then we would take a decision,'' he said.

SEBI had, last week, announced changes in merger rules, by making it mandatory for companies to share the merchant bankers` fairness report on equity valuation with the shareholders, in order to safeguard the interest of shareholders of the merging companies.

''The fairness opinion (report) of the merchant bankers shall be made available to the shareholders at the time of approving the (merger) resolution,'' SEBI said while amending the clause 24 of the listing agreement.

Under clause 24, listed as well as an unlisted companies, which are getting merged, are required to obtain fairness opinion on valuation of shares by an independent merchant banker.

SEBI had also amended other clauses in the equity listing agreement to reduce time duration for issuance of rights issue, as approved by its board earlier.

Following the amendments, a listed entity would be permitted to publish only consolidated financial results, provided it complies with other listing guidelines.