India’s securities regulator, Sebi, plans to relax regulations for small debt raises, potentially reducing costs and increasing efficiency for listed companies seeking private placements, especially smaller issuers.
India’s securities regulator has proposed a lighter-touch rule for some small debt deals, in a move that could cut costs for listed companies raising money through private placements.
The Securities and Exchange Board of India said it is considering waiving the need to hire a merchant banker for certain small-value debt issues by listed issuers. Under the proposal, small-value debt would cover debt securities and non-convertible redeemable preference shares issued at a face value of ₹10,000.
Sebi said the current rule can add an outsized cost to relatively small fundraisings, especially for smaller issuers. It also pointed to a limited pool of merchant bankers in the debt market and the risk of delays when private placements need to be completed quickly, particularly when bond yields are moving sharply.
The change, if adopted, would be aimed at making small debt raisings more efficient without changing the basic disclosure framework for listed issuers. For companies that rely on repeated, modest-size placements, the proposal could make access to the market quicker and cheaper.
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