ASBA – An Investor Friendly Initiative of SEBI
Publication: SEBI and Corporate Laws Magazine, July 2010 Article Summary: This article explains the Application Supported by Blocked Amount (ASBA) mechanism introduced by SEBI to improve efficiency and investor convenience in public issue applications. ASBA allows investors to apply for IPOs, follow-on public offers, and rights issues without making upfront payments; instead, the application amount […]
Indian Depository Receipts (IDRs) – A Home Visit
Publication: Capital Market, April 2010 Article Summary: This article analyses the introduction of Indian Depository Receipts (IDRs) as a mechanism enabling foreign companies to raise capital from Indian investors, marking a shift from the earlier trend of Indian firms accessing global markets through ADRs and GDRs. IDRs represent underlying shares of foreign companies, issued in […]
Differential Voting Rights Shares – Class Apart
Publication: Capital Market, April 2010 Article Summary: This article analyses the concept of Differential Voting Rights Shares (DVRS) and the evolving regulatory stance governing their issuance in India. DVRS allow companies to issue equity shares with varying voting rights, enabling flexibility in capital structuring. Such instruments can either grant inferior voting rights with higher dividends […]
IPO/FPO Norms – Goodbye to the Good, Old Days
Publication: Capital Market, April 2010 Article Summary: This article examines the regulatory change introduced by SEBI mandating 100% upfront payment of application money for all categories of investors in IPOs, FPOs, and rights issues. Institutional investors were previously allowed to pay only 10% at the time of application, with the balance payable upon allotment. The […]
PSU FPO Bidding – In the Eye of the Storm
Publication: Capital Market, March 2010 Article Summary: This article analyses the shift in pricing mechanisms for public sector Follow-on Public Offers (FPOs), focusing on the adoption of the French auction method in contrast to the traditional Dutch auction (book-building) approach. The Dutch auction method determines a uniform cut-off price based on investor demand, whereas the […]
ASBA – Investing Without Any fear.
Publication: Capital Market, February 2010 Article Summary: This article explains the Application Supported by Blocked Amount (ASBA) mechanism as a significant reform in the IPO, FPO, and rights issue application process. ASBA enables investors to participate in public issues without making upfront payments, as the application amount is merely blocked in the investor’s bank account […]
Preferential Warrants to Promoters – Followed in Letter Rather Than in Spirit
Publication: Capital Market, January 2010 Article Summary: This article analyses the use of preferential warrants by promoters as a mechanism to increase stake in their own companies, highlighting structural concerns in regulatory framework governing preferential warrants. Preferential warrants allow promoters to subscribe to equity shares by paying only 25% upfront, with the remaining 75% payable […]
Capital Restructuring – Selective Targeting of Minority Shareholders
Publication: Capital Market, December 2009 Article Summary: This article highlights the misuse of capital reduction provisions under Section 100 of erstwhile Companies Act, 1956, by promoters to selectively eliminate minority shareholders. While capital reduction is intended to return excess capital to shareholders, the article highlights how it was being increasingly misused as a tool by […]
Consent Orders & Compounding of Offences – An Escape Mechanism from Prosecution
Publication: Chartered Secretary, December 2009 Article Summary: This article examines the framework of consent orders and compounding of offences as alternative mechanisms to resolve regulatory violations without undergoing lengthy prosecution. Compounding involves admission of guilt and payment of penalty in lieu of prosecution, while consent orders—introduced by SEBI in 2007—allow settlement of civil and administrative […]
Delisting of Shares – A Comprehensive Analysis
Publication: SEBI and Corporate Laws Magazine, December 2009 Article Summary: This article provides a comprehensive analysis of the regulatory framework governing delisting of shares in India, particularly following the introduction of the SEBI (Delisting of Equity Shares) Regulations, 2009. Delisting refers to the removal of a company’s securities from stock exchanges, either voluntarily by promoters […]