Issuing shares to the public has just got easier. Markets regulator Securities and Exchange Board of India (SEBI) on Thursday made it easier for well-established companies already listed on the stock exchanges to make follow-on or rights issues of stock by filing a copy of the Red Herring Prospectus (in case of a book-built issue) or Prospectus (in case of fixed prices issue).
Currently all issues including rights issues require companies to first file a draft offer document, similar to that of an initial public offer (IPO). This is processed by SEBI and the stock exchanges. The new process will cut the time to market from weeks to a few days. SEBI's new guidelines allow companies with a three year track record of compliance with the listing agreement, an average market capitalisation of Rs 10,000 crore for at least one year, and a trading turnover of two per cent of the total number of shares listed to make 'fast track' issues.