A clutch of Indian companies may soon get to raise funds faster. The Securities and Exchange Board of India (SEBI) is planning to classify companies with a good track record and allow them to take the fast-track route to fund-raising.
"Initially, around 30 companies will be classified as 'Well Known Seasoned Issuers' with a large qualifying limit, and later on some more companies can also be added," SEBI chairman M Damodaran told reporters on Wednesday.
In October, Damodaran had said SEBI would introduce the concept of 'Well Known Seasoned Issuers' in India in the next one month to enable institutions with good track record to access the capital market faster.
The reasoning behind this move is that large companies with a credible track record for complying with corporate governance practices should be allowed more relaxed norms to fund raising.
About the interest of foreign institutional investors (FII) registering themselves with the regulator, after the latter had banned participatory notes issued on derivatives as underlying, Damodaran said a large number of applications have already come in. "There is no evidence of people walking away, as they want to buy into India's story of optimism," he said. Further, terming the lack of depth in corporate bond market as a major failure in the last 60 years, Damodaran said developing the corporate bond market is SEBI's priority and the regulator was now trying to make up for what was lost in the past.
He reiterated that the regulator was considering permitting the launch of real estate investment trusts (REITS) in India.
REITS are funds that invest in properties and pay dividends out of rental income.
The regulator has been working on the guidelines for real estate mutual funds along with the Institute of Chartered Accountants of India and the Association of Mutual Funds in India.