Indian stock market regulator, the Security and Exchange of India (SEBI) has made some amendments in the norms related to right issue. The new norms will enable companies to utilize the issue proceeds after the completion of 'allotment of rights share', as against the earlier provisions of using the rights issue proceeds after receiving minimum 90% subscription.

The regulator, through a circular, informed: "In view of this it has been decided to amend clause 8.19 of the Sebi (DIP) guidelines to provide that the issuer company can utilize the issue proceeds only after the basis of allotment is finalized."

Prime Database Managing Director, Prithvi Haldea, termed the amendments as a major step for carrying out reforms in right issue. Under new norms, the issue will be considered as complete after the allotment of all shares by the issuing company.

SEBI said: "In order to encourage listed companies to look at rights issues as a viable form of raising capital by reducing the overall cost of such issuances and to make the process faster, it has been decided to rationalize the disclosure requirements for rights issues."