Comments on SEBI AIF and Delisting norms by Vikram Raghani, J Sagar Associates
SEBI announced few changes to delisting norms and alternative investment funds in a meeting yesteday. SEBI has also has announced to remove the list of restricted activities or sectors from the definition of venture capital undertaking, to provide flexibility to venture capital funds registered under alternative investment funds (AIFs) in making investments.
“The decisions taken today touch upon several areas of securities laws ranging from AIFs, start-ups to delisting. One will need to see the final text of the amendments to understand the impact of these changes which are generally in line with discussion papers released by SEBI in each of these areas last year. Reforms in areas such as delisting are pro-public shareholders and will bring about transparency and efficiency in the process.” said Vikram Raghani, Partner, J Sagar Associates.
Timelines for completion of various activities forming part of delisting process have been introduced or revised to make the process more efficient, Sebi said.
Promoter or acquirer will be required to disclose their intention to delist the company by making an initial public announcement.
Besides, promoter or acquirer will be permitted to specify an indicative price for delisting which should not be less than the floor price.
Further, promoter will be bound to accept the price discovered through reverse book building if the same is equal to the floor price or indicative price.
In addition, role of merchant banker involved in the delisting process has been elaborated.
With regard to AIF, Sebi has approved amendment to AIF norms to provide a definition of ''start-up'' as specified by the central government for the purpose of investment by angel funds.
Besides, it decided to allow AIFs, including Fund of AIFs, to simultaneously invest in units of other AIFs and directly in securities of investee companies subject to certain conditions.