Tag: Capital Markets
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Prospects for Recovery of Capital Markets
Now that green shoots are visible in the Indian markets with some encouragement from the formation of the new Government, there is an expectation that capital markets are poised for recovery. There seems to be a steady flow of foreign capital into the Indian markets, and Indian companies too seem to be raising capital, albeit
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SEC Proposals to Curb Short Selling
Who Shall Govern? CEO/Board Power, Demographic Similarity, and New Director Selection The U.S. SEC earlier this week announced a set of proposals to curb short selling. One the one hand, it is argued by proponents of short selling (primarily institutional investors such as hedge funds) that such activity helps contribute to market efficiency. On the
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Staid Capital Markets
Primary capital market activity in the form of public offerings and rights offerings is virtually down to a trickle. While that is not at all surprising considering the somber market conditions, some numbers have been recently reported in the Business Standard as follows: Fund mobilisation through initial public offerings (IPOs) touched a six-year low in
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The Policy Over ECBs
Satyajit Gupta has an interesting column in The Mint that reviews the changes in the external commercial borrowings (ECBs) policy over the last few years in the context of changing economic conditions both within India and around the world. As for recent efforts by the Reserve Bank of India (RBI), Satyajit notes: “ECBs have suffered
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Proposed Change in Takeover Rules: More than Just Satyam
A few days ago, when newspapers reported that SEBI was considering an exemption from the minimum pricing norms in the context of a potential takeover offer on Satyam, the obvious question arose as to how an exception can be made in respect of a single company, and that too one which has been the subject
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Key Decisions at SEBI Board Meeting
SEBI’s recent board meeting has resulted in certain significant decisions impacting capital markets activity in India as well as SEBI’s own decision-making process. Public/Rights Offerings: Observation Letter When a draft offer document is filed with SEBI, either in a public offering (initial public offering (IPO) or follow-on public offering (FPO)) or in a rights offering,
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Rating the Raters
Even since the subprime crisis erupted last year, there has been an extensive debate about the role of credit rating agencies in exacerbating the crisis. Questions have been raised whether the rating agencies ought to have raised the red flag much earlier than they actually did, thereby protecting the interests of investors who placed reliance
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The Effectiveness of IPO Grading
On April 30, 2007, the SEBI (Disclosure and Investor Protection) Guidelines were amended to introduce the novel concept of IPO grading. Following the insertion of clause 2.5A, companies going in for an IPO are required to obtain grading from at least one credit rating agency. Further, all grades obtained are required to be disclosed in
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FCEB Scheme Operationalised
In February this year, the Government (Ministry of Finance) had issued a notification introducing Foreign Currency Exchange Bonds (FCEBs) that offered Indian companies an additional avenue to raise finances from overseas. We had discussed the implications of FCEBs in a post at that time. Now, the RBI has issued a circular operationalising the scheme paving
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Short Selling Restrictions Gain Traction
Due to allegations that the stock price of several financial institutions involved in the current crisis were beaten down by short sellers, several jurisdictions have recently introduced greater curbs on short selling. The U.S. Securities and Exchange Commission (SEC) has introduced temporary bans on short selling in securities of 799 financial companies (see this report
