SEBI relief to promoters; Decision to raise creeping acquisition limit should have come in March, Anil Singhvi says
The Securities and Exchange Board of India’s (SEBI) decision to increase creeping acquisition limit for promoters of listed companies is a good step, Zee Business Managing Editor Anil Singhvi said
The Securities and Exchange Board of India’s (SEBI) decision to increase creeping acquisition limit for promoters of listed companies is a good step, Zee Business Managing Editor Anil Singhvi said.
In an amendment of the takeover regulations notified on June 16, the market regulator allowed a shareholder owning 25 per cent or more of the shares or voting rights in a company to increase his shareholding by up to 10 per cent in a year versus the earlier 5 per cent limit.
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प्रोमोटर्स को सेबी से राहत...अनिल सिंघवी ने कहा- टुकड़ों में राहत देने की जगह सीधे 75% तक हिस्सा खरीदने की मिले अनुमति... बोले- मार्च में आना चाहिए था फैसला#EditorsTake #SEBI #NSE #BSE #Sensex #Nifty @AnilSinghvi_ @SEBI_India pic.twitter.com/mij0Jd5Lc2
— Zee Business (@ZeeBusiness) June 17, 2020
The Managing Editor, however, said that SEBI should not give the concessions in bits and pieces. Singhvi said that at the time of market upheavals, retail investors do not have the wherewithal to buy large amount of shares. During such times, only the promoters have the capacity to buy shares, he added.
He said that the promoters should be allowed to buy as much shares as they want till they reach the ceiling of 75 per cent. Increasing the limit by 5 per cent every year is not sound, he added. In extraordinary situations, promoters should be allowed to buy more shares, he said.
The Managing Editor also said that the promoters are best equipped to buy shares as they have money and also know about the right valuations of the company's shares are.
The Market Guru said that he did not see any reason why this decision could not have been taken in March, when the markets were volatile and there was panic all around.
In a panic mode, markets need buyers who have the capacity to buy shares. The market regulator has to ensure that there are enough buyers in the markets during such times.
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He said that allowing promoters to buy more in panic situations will serve two broad purposes – one it will ensure that there is liquidity in the market and second it will give assurances to retail investors to invest in those stocks.
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11:18 AM IST