Sebi allows govt room to lure retail investors

NEW DELHI: The Securities & Exchange Board of India has decided against giving any immediate relief to the government to boost share sales through follow-on public offers (FPOs), even as it has provided some flexibility in offer-for-sale (OFS) on stock exchanges to boost retail investor participation in the disinvestment programme.

The government has decided to double the share of OFS reserved for retail investors to 20%, using the flexibility available in Sebi rules that allow issuers to raise the floor beyond 10%. It has also decided to give an additional day to announce the OFS against the current stipulation that the issue can only be announced a day before the auction on the stock exchanges. The finance ministry had argued that the move will help generate more awareness about the issue among retail investors and get then to invest.

In case of FPOs, however, the market regulator is of the view that the process of easing the rules will take at least six months, a move that will not help a majority of the government disinvestment programme and only a handful of share sales in March will benefit.

Securities and Exchange Board of India ( SEBI )