SEBI eases pricing framework for preferential issue of shares
New Delhi, June 25
Liberalised Norms For Raising Funds
- The market watchdog would provide an additional option to the existing pricing methodology for preferential issuance of shares
- In case of frequently traded shares, the price of the equity shares to be allotted pursuant to the preferential issue should not be less than higher of “the average of the weekly high and low of the volume weighted average price of the related equity shares” during the 12 weeks preceding the relevant date
Market regulator SEBI on Thursday decided to temporarily relax pricing framework for preferential allotment of shares as part of efforts to liberalise norms for raising funds amid the coronavirus pandemic.
The watchdog would provide an additional option to the existing pricing methodology for preferential issuances, said a statement issued by SEBI.
In the wake of challenges faced by the corporates due to Covid, SEBI has been receiving representations from various stakeholders for temporarily liberalising regulations relating to raising capital from the securities market.
In case of frequently traded shares, the price of the equity shares to be allotted pursuant to the preferential issue should not be less than higher of “the average of the weekly high and low of the volume weighted average price of the related equity shares” during the 12 weeks preceding the relevant date.
Further, companies can consider “the average of the weekly high and low of the volume weighted average prices of the related equity shares quoted on a recognised stock exchange during the two weeks preceding the relevant date” for pricing guideline for preferential issue. — PTI
