Sebi notifies buyback norms; cos must repurchase at least 50%
PrintListen to this Article
The norms aim at safeguarding the interest of public shareholders.
The companies will now have to complete their buyback offers within six months, from 12 months currently. Those not able to meet the target will be barred from launching another offer for a period of one year.
The Securities and Exchange Board of India (Sebi) in June, cleared the new buyback norms alongwith a number of other measures.
Under the new norms, the companies are being asked to keep 25 per cent of the proposed buyback offer amount in an escrow account, so as to check companies from making non- serious offers that could wrongly influence the share prices.
It will also be mandatory for companies to buyback a minimum of 50 per cent shares of the total targeted amount.
In case companies falter on some account, there will be a penalty and that could be of a maximum 2.5 per cent on the funds lying in the escrow account.
In the past three years, there have been 75 buyback cases through open market purchases, where most companies could meet only 49.91 per cent of their buyback targets. The companies will also be required to make public the number of shares purchased and the amount utilised on a daily basis.
Companies that fail to meet the buyback target would not be allowed to come up with another offer for one year.
In a bid to encourage buybacks using tender method, where larger amount of surplus funds are involved, Sebi said that companies are required to buyback at least 15 per cent of targeted amount.
At present there are two routes by which a company can come out with a buyback - open market and tender offer.
In an open market offer, companies can buyback shares from shareholders without knowing the buyer, while tender offer involves the company writing to its shareholders individually to know their willingness for sale of shares in the buyback.
Category : SEBI | Comments : 0 | Hits : 438
A financial influencer, also known as finfluencer, who was also involved in imparting training related to stock market trading has been asked to part with a little over ?12 crore, which it made unlawfully. The funds are to be credited or deposited by Ravindra Balu Bharti into an interest-bearing escrow account that has been set up in a nationalised bank especially for that purpose. The regulator stated in an order that the escrow account(s) would establish a lien in favour of SEBI and that th...
The Securities and Exchange Board of India (Sebi), the country's market regulator, has announced the launch of an optional same-day (T+0) settlement cycle for a select group of 25 stocks starting March 28, as per a circular published on its website last Thursday. This new initiative, referred to as the beta version, is set to coexist with the traditional next-day (T+1) settlement cycle, where trades are settled within 24 hours of execution. The T+0 settlement option will be available for ...
Capital markets regulator Sebi on Thursday slapped a fine of Rs 48 lakh on eight entities, including promoters of United Polyfab Gujarat Ltd (UPGL), for manipulating the share prices of the company. These entities have to pay the penalty jointly and severally within 45 days, as per an order. The order came after Sebi conducted an investigation of UPGL and trading by certain entities in the scrip of the company, to ascertain whether there was any violation of the provisions of the PFUTP (Pr...
Sebi alerts investors about the growing trend of unregistered entities falsely claiming Sebi registration and offering unrealistic returns. Investors are advised to verify the registration status and consider the inherent risks associated with high-return investments. The Securities and Exchange Board of India (Sebi) has issued a warning to investors, cautioning them against investing money with unregistered entities that promise assured or exceptionally high returns on investments. This advi...
Capital markets regulator Sebi on Thursday issued orders of action against 15 guest experts of the Zee Business channel for unlawful trading. The entities made unlawful gains to the tune of Rs. 7.41 crore from such trades and the profit was shared with guest experts as per prior understanding, Sebi noted. The market regulator also asked the guest experts to pay Rs.7.41 crore. The guest experts appeared on the Zee Business channel from 1 February 2022 and 31 December 2022. "The facts of t...
Comments