Engineering major Larsen & Toubro (L&T) on Saturday said market regulator, SEBI, has barred the company from carrying out its Rs 9,000 crore share buyback offer. SEBI in its letter said the proposed buyback would violate the Companies Act and SEBI norms since the ratio of the company’s total secured and unsecured debts would be more than twice the paid-up capital and free reserves of the company. L&T had proposed to buy back up to 6.1 crore shares from shareholders at a price of Rs 1,475 per equity share, aggregating to Rs 9,000 crore.
The shares of Sun Pharmaceutical Industries, country’s largest drugmaker, plunged 8.52% to a six-year low on Friday, wiping out Rs 8,735 crore market cap after reports of a fresh whistle-blower complaint surfaced. Sun Pharma pleaded market regulator SEBI to probe the role of some media houses with regard to the allegations raised by the whistle-blower. The complaint alleged transactions worth over Rs 5,800 crore, during 2014 to 2017, were entered into between Aditya Medisales (AML) and Suraksha Realty, a firm controlled by Sudhir Valia, a senior executive and close relative of Sun Pharma promoter Dilip Shanghvi.
Religare Enterprises has paid Rs 2 lakh to settle the alleged insider trading charges by SEBI. SEBI had initiated adjudication proceedings against Religare and sent a notice in July 2018 for failure to disclose the information with regard to trading in the scrip of Religare Enterprises by its chairman Sunil Godhwani to the exchanges within stipulated time and, hence, alleged to have violated the PIT (Prohibition of Insider Trading) norms. The company approached SEBI with a settlement plea. Under the settlement regulations, an entity is allowed to settle charges by paying a penalty without admission or denial of guilt.
The Securities and Exchange Board of India (SEBI) has proposed allowing commodity exchanges to create indices on which futures contracts can be introduced. Such indices can be based on the most liquid contracts, and have to be diversified with the weightage of a single constituent capped at 20%. The minimum lot size of a futures contract introduced on such indices has been proposed at Rs. 5 lakh.
Market regulator SEBI, in a circular on Wednesday, permitted mutual funds to write call options of stocks that are part of the benchmark indices under a covered call strategy. However, as per SEBI rules, the total notional value (taking into account strike price as well as premium value) of call options written by a scheme shall not exceed 15% of the total market value of equity shares held in that scheme. In case of any passive breach, the scheme will have seven trading days to re-balance the portfolio during which no additional calls can be written in the scheme.
Market regulator SEBI may soon tighten norms for liquid funds, the most popular mutual fund product among institutional investors with average assets under management (AUM) of over Rs 6 lakh crore. Proposals under consideration by SEBI for liquid schemes include mandatory minimum investments in short-term government bonds and stricter valuation norms. SEBI is also evaluating a proposal to introduce a lock-in period for investments in liquid funds but such a move could hamper investor interest. NAV of many liquid funds has been badly hit due to their exposure in IL&FS group which recently defaulted on payments to mutual funds.
As per the latest data from Association of Mutual Funds in India (Amfi), the asset under management (AUM) of mutual funds grew for the sixth consecutive year in 2018 by 5.54% or Rs 1.24 lakh crore to Rs 23.61 lakh crore at the end of December 2018. The AUM stood at Rs 22.37 lakh crore at the end of December 2017. The growth in AUM was buoyed by consistent SIP inflows and a strong retail participation despite the market volatility and negative global factors. However, the AUM had surged by 32% to add over Rs 5.4 lakh crore in 2017.
SEBI has notified new rules which mandated filing of fresh offer documents in case of change in issue size. Under the new rules, filing of a fresh offer document is required in case of any increase or decrease in the estimated issue (new) size by more than 20%. At present, such requirement is both for fresh issues and offer for sale (OFS). In case of an OFS, fresh filing of documents is required where the change in the number of shares offered for sale, or in the estimated issue size, is more than 50%.
Markets regulator SEBI has ordered attachment of bank and demat accounts, along with mutual fund folios, of Lokmangal Agro Industries and its directors to recover dues of around Rs 75 crore. The regulator in May 2018 had directed the company and its seven directors to refund Rs 74.82 crore which they had raised from the investors in contravention of the Companies Act and ICDR (Issue of Capital and Disclosure Requirements) Regulations. Besides, they were banned from the securities market for at least four years.
145 small and medium enterprises (SMEs) raised a record Rs 2,455 crore through initial public offerings (IPOs) in 2018, a surge of 37% from the Rs 1,785 crore raised in 2017. Funds raised through IPOs in 2018 were mainly used for business expansion plans and working capital requirements. SEBI had brought down the minimum anchor investor size in SME IPO to Rs 2 crore from Rs 10 crore which boosted investor interest and participation. So far 474 firms have garnered Rs 5,825 crore since 2012, when the BSE and the NSE launched the SME listing platforms.
Increasing number of HNIs and retails investors have started investing in index funds and ETFs after the large-cap funds have failed to outperform their benchmarks. As per data from Accord Fintech, only 2 out of 32 large-cap funds could outperform their benchmark indices over the last one year. Large cap funds have lagged behind after the SEBI norms on categorisation of mutual fund schemes mandated large cap funds to hold 80% of their portfolio in top 100 stocks by market capitalisation. The assets under management (AUM) of passively managed funds have crossed the Rs 1 lakh crore mark.
Excessive speculative trading by retail investors has prompted market regulator SEBI to implement mandatory physical settlement for all stock derivatives by October 2019. According to a SEBI circular, the new system will be implemented in three phases starting April 2019. The bottom 50 companies, ranked in descending order based on average daily market capitalisation during December 2018, will be moved to mandatory physical settlement by April 2019, followed by the next 50 bottom companies by July 2019. Remaining stocks will be moved to physical settlement by October 2019. SEBI has already shifted around 40 stocks to mandatory physical settlement.
Capital markets regulator SEBI on Friday expanded its offer for sale (OFS) framework to all the companies with market capitalisation of Rs 1,000 crore and above. Currently, the OFS mechanism is available to top 200 companies by market capitalisation. Also, if the seller fails to get sufficient bids from non-retail investors at or above the floor price on the first day of the offer, then the seller may choose to cancel the offer post bidding, in full (both retail and non-retail), on the first day itself and not proceed with the offer to retail investors on the second day.