To achieve this effect, SEBI has changed its listing standards and disclosure requirements. (File)
New Delhi:
The capital markets regulator, the Securities and Exchange Board of India (Sebi), may relax regulatory standards for the central government regarding the strategic divestment of publicly owned companies (PSUs), according to a notice.
“The Board (Sebi) may, after considering the interests of the investors and the securities market and for the development of the securities market, relax the strict enforcement of any of the requirements of these regulations if an application is made by the Central Government in connection with its strategic divestment of a publicly traded entity,” Sebi said in a notice made public Tuesday.
To achieve this effect, the regulator has adjusted the LODR standards (Listing Obligations and Disclosure Requirements).
Earlier in September, the Securities and Exchange Board of India (Sebi) had decided to waive the requirement for calculating the open bid price related to the divestment of PSUs.
According to Sebi standards, one of the parameters prescribed to determine the open offering price of a commonly traded scrip is the Volume-Weighted Average Market Price (VWAMP) for 60 trading days immediately prior to the public announcement date.
The board of Sebi approved the amendment of the acquisition rules in the context of the strategic divestment of PSUs and the consideration to be paid in the context of an open offer.
“The market price of the PSU company undergoing strategic divestment becomes susceptible to… periodic disclosures.”
“Given the unique nature of the transaction and the process involved in a PSU divestiture spanning a long period of time, such an open bid price determination requirement under takeover regulations often acts as an impediment to fertilizing such a divestiture. strategic divestment of PSUs,” Sebi has said.
Against this background, Sebi has decided to waive the requirement to calculate 60-day VWAMP for determining the open bid price in the event of a divestiture of PSU businesses resulting in a change of control, either through of direct acquisition or indirect acquisition. .
(Except for the headline, this story has not been edited by DailyExpertNews staff and is being published from a syndicated feed.)
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