In its board meeting on 18 June, the Indian capital market regulator, SEBI provided a further boost to the Indian capital market by introducing a series of proposals.
The concept of an “anchor investor” was introduced for IPOs, anchor investor being a principal investor who makes a specified commitment to subscribe to a certain percentage of company shares.
The meeting approved a resolution to allow an issuing company to allocate up to 30% of the overall allocation limit on a discretionary basis, in favour of multiple anchor investors, providing that each anchor investor agrees to subscribe to at least Rs100 million (about US$2 million), of which 25% is to be contributed up front and the balance within two days of the closure of the public issue.
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The legislative and regulatory update is compiled by Nishith Desai Associates, a Mumbai-based law firm. The authors can be contacted at nishith@nishithdesai.com. Readers should not act on the basis of this information without seeking professional legal advice.
