The Securities and Exchange Board of India (SEBI) issued draft rules on Tuesday aimed at allowing listed companies to make frequent debt issuances after filing for a shelf prospectus.
Currently only banks and financial institutions are allowed to raise debt through a shelf offering, a common feature in bond markets used by frequent issuers, or those that want to raise funds in tranches across a period of time.
As per the existing norms, companies, including non-banking financial companies (NBFCs), have to seek fresh approvals every time they need to sell debt.
SEBI draft rules issued on Tuesday would allow companies to issue non-convertible debentures through a shelf offering, subject to certain conditions including a minimal “AA” credit rating and net worth of at least 5 billion rupees.
Infrastructure Debt Funds (IDFs) and companies that are eligible to issue tax-free bonds, will also be allowed to make issuances through a single shelf offering, the draft rules said.