SEBI Eases Fundraising For Stressed Companies
To ease fundraising for stressed companies, markets regulator Sebi on Wednesday proposed easier pricing guidelines under the preferential route and exemption from making an open offer for the allottees of such issue. Accordingly, in the draft papers, Sebi has proposed pricing should not be less than the average of the weekly high and low of the volume weighted average prices of the related equity shares on a recognised stock exchange during the two weeks preceding the relevant date. At present, the determination of the pricing covers a period of 26 weeks or more for frequently traded shares. This large latency in pricing period especially given the deteriorating financial condition of the listed company leads to a wide gap in pricing between the price at the beginning of the 26 weeks and the current price when funds are required to be raised. Further, a case has also made by such investors to have a substantial holding in the company, in order to take control over the operations of the company and guide the company out of the stress.
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