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SEBI slashes filing fees for public offerings, rights issues
Photo Credit: Reuters

The Securities and Exchange Board of India (SEBI) has reduced filing fees by 50% on draft IPO proposals filed between June 2020 and March 2021.

The move is part of SEBI’s continuing efforts to help market participants to tide over challenges due to COVID-19 and boost market sentiment.

Filling fees on proposal documents for public issues, rights issues and share buybacks will also be reduced to 50% and will be effective for documents filed from June to December 2020.

The changes are temporary and come into immediate effect, SEBI said.

Last week, SEBI reduced minimum subscription levels and allowed higher-than-stipulated revisions in issue size after receiving industry representations and assessing the impact of the coronavirus pandemic on capital markets activity.

While the chances of companies launching public issues are bleak given the state of capital markets, SEBI has allowed companies floating IPOs to tweak their issue size by up to 50%.

Such companies will not be required to file fresh draft documents with the market regulator if there are no material changes to the use of proceeds.

As per existing SEBI regulations, companies were required to file fresh documents if their issue size either increased or decreased by 20% of their estimated issue size at the time of filing their draft red herring prospectus.

According to the SEBI website, three companies — ESAF Small Finance Bank, Appejay Surendra Park Hotels, and PE-backed NCDEX — had received IPO approval after March 1.

Besides, nearly 20 companies are in the queue either with valid approval or waiting for SEBI’s nod for an IPO.

SEBI also allowed certain relaxations for companies' equity via a rights issue. The minimum subscription level is revised to 75% compared with the actual requirement of 90% bids for shares in a rights issue besides introducing relaxations on timelines and the quantum of fundraising.

These changes also come into force with immediate effect and will apply to rights issues opening on or before March 31 next year.

In March, SEBI provided a two-month relief to alternative investment funds to meet their regulatory disclosure obligations because of the ongoing coronavirus crisis.

The deadline to make regulatory filings for AIFs for the periods ending March 31 and April 30 was extended by two months over and above the timelines prescribed under its regulations, SEBI had said.

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