Sebi proposes to allow certain companies to file shelf prospectus
November, 27th 2013
To make fund raising process easier, Sebi proposed allowing public sector financial institutions, scheduled banks and NBFCs, among others, to file shelf prospectus for issuance of non-convertible debt securities.
Shelf prospectus allows frequent issuers to raise money, without the requirement of filing separate prospectus for every issuance.
It is proposed to allow public financial institutions and scheduled banks, Infrastructure Debt Funds-Non-Banking Financial Companies (IDF-NBFC) and other NBFCs to file shelf prospectus for raising funds through non-convertible debt securities, Sebi said in a circular.
The Securities and Exchange Board of India (Sebi) has also suggested allowing issuers authorised by CBDT to make public issue tax free secured bonds to file shelf prospectus.
The market watchdog has sought public comments on recommendations made by its Corporate Bonds & Securitization Advisory Committee. Suggestions can be given till December 2.
The provision of filing a shelf prospectus for certain entities is there in Companies Act.
As per the panel's recommendations, NBFCs and other listed issuers would be eligible for filing shelf prospectus only if meet certain criteria, including having a networth of at least Rs 500 crore.
The information memorandum/tranche prospectus filed should contain the disclosures prescribed by Companies Act, 2013, as well as details on revision in ratings.
As per the Companies Act, a company filing a shelf prospectus with the Registrar of Companies (RoC) is not required to file prospectus afresh at every stage of offer of securities for the specified period.
Among others, the shelf prospectus is required to show all material facts relating changes in the company's financial position. Five companies had filed shelf prospectus in 2012-13, while seven filed shelf prospectus in the preceding fiscal