Prof. Jayanth R. Varma's Financial Markets Blog

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Prof. Jayanth R. Varma's Financial Markets Blog, A Blog on Financial Markets and Their Regulation

© Prof. Jayanth R. Varma
jrvarma@iima.ac.in

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Fri, 15 Aug 2008

Faster rights issues in India

The Securities and Exchange Board of India (SEBI) has announced “changes in timeline [that] would enable a right issue to be completed within about 43 days as against about 109 days currently available for a rights issue.” It is indeed very creditable that SEBI has chose to attack the problem decisively rather than tinker at the edges.

Just to provide perspective, the ill fated rights issue of HBOS in the UK took almost three months (from late April to late July) to complete and during this period a 45% discount to the market price turned into a premium. After this experience, the UK is also attempting to bring this period down.

Posted at 11:36 on Fri, 15 Aug 2008     1 comments     permanent link

Comments...

Ankit wrote on Tue, 19 Aug 2008 17:23

Re: Faster rights issues in India

The move to reduce the pricing guidelines for QIPs and private placement is a welcome move. It will corporates raising funds in a bear market. SEBI has taken some very effective measures.