India allows follow-on share offerings for loss-making firms

MUMBAI, Oct 6 (Reuters) - India's capital markets regulatoron Saturday permitted loss-making listed firms to raise funds byselling shares, making it easier for such firms to meet theircapital needs.

Previously, only profitable companies were allowed to sellshares via a follow-on offering.

The Securities and Exchange Board of India (SEBI) alsorelaxed rules regarding the debt limit allocation mechanism forforeign institutional investors, allowing them to re-invest upto 50 percent of their previous year's debt holdings.

The measure will come into effect from 2014, the regulatorsaid in a statement.

The regulator also reduced the timeframe within whichforeign investors must use their debt auction limits, to 30 daysfrom 45 days for government bonds, and to 60 days from 90 daysfor corporate bonds.

The move is intended to free up debt auction limits fasterso that they can be sold to those foreign investors who are morewilling to use them.

The regulator also proposed to frame uniform guidelines forall foreign portfolio investors, a step which is expected tohelp better regulate their investments.

It also allowed debt oriented mutual funds to invest up to10 percent of their net assets in housing finance companies.

However, such investments by mutual funds cannot exceed 30percent of their net assets, it said.

(Reporting by Swati Pandey; Editing by Rajesh Kumar Singh)


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Keywords: INDIA SEBI/