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Showing posts from February, 2013

SEBI's Circulars About Enhancing Liquidity And Curbing Manipulation Regarding Illiquid Scrips

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SEBI recently has come out with two different circulars in respect to illiquid scrips wherein one circular talks about enhancing liquidity in the illiquid scrips by promoting incentives by stock exchanges on trading in such scrips, another circular aims at curbing manipulations in the illiquid scrips by introducing Periodic Call Auction in illiquid scrips.

Ms. Deepika Vijay Sawhney
Partner
+919818316936
deepika@indiacp.com The definition of illiquid scrips is kept different in both the circulars with the definition being much wider in case of scrips qualifying for Periodic Call Auctions.
The provisions of both the circulars are discussed in detail hereunder:
1. Introduction of Liquidity Enhancement Scheme for illiquid scrips in Equity Cash Market by Circular dated February 08, 2013:

Companies Bill 2013: Merger- Holding & Subsidiary

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The Companies Bill, 2012 proposes a fast track and simplified procedure for mergers and amalgamations of certain class of companies such as holding and subsidiary, and small companies. This is a welcome move. The Companies Act, 1956 does not offer a simple process for such mergers and all such restructuring have to follow a cumbersome and time consuming process as any other mergers or amalgamations. The process involves seeking approval from shareholders, creditors, Registrar of Companies and the Official Liquidator as well as a High Court.

There was a long felt need to simplify and fast track the procedure for mergers of holding-subsidiary or companies where interest of third parties is not involved. And so, the Companies Bill, 2012 has separate provisions to deal with mergers and amalgamations of holding and wholly-owned subsidiary companies, small companies and such other class of companies as the Central Government may prescribe. A ‘small company’ is a company other than a public …

Indian Real Estate Sector

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It’s a fact now that even when the world economy is in doldrums, India though itself a little weak on the growth path, is one of the fastest growing economies today. With a lot of foreign players coming into the Country and the competitive indigenous enterprises, the resources of the Country are being tapped well and cross industry growth is taking place. A perfect example of such industry which is growing hand in hand with all other sectors is the Real Estate industry. Developments in sectors such as hospitality, retail, entertainment and services like education and health care influence developments in the Real Estate sector too. As per Indian Brand Equity Foundation (IBEF), the real estate in India contributes about 5% to India’s GDP.

Mr. Manoj Kumar
Vice President
+919910688433
manoj@indiacp.com Not only this, the real estate sector is touted to be the second largest employer in the economy after agriculture. The sector has ample backward and forward linkages with sectors such as hou…

SEBI’s Stringent Roadmap for Merger/Demerger of Listed Company

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SEBI has issued a Circular No. CIR/CFD/DIL/5/2013 dated 4th February, 2013, to revamp the whole process of approval of Scheme of Mergers/demergers involving listed Companies. At present all schemes of merger/demerger/reduction of capital involving listed companies require a No Objection of Stock Exchanges before the schemes/petitions are filed before the High Court having jurisdiction over the companies. Similarly, schemes which allow listing of unlisted companies require approval of the SEBI after the scheme is approved by the High Court. As per the circular SEBI has observed that, in the recent past, the applications received for seeking exemption, contained inadequate disclosures, convoluted schemes of arrangement, exaggerated valuations, etc and is of the view that granting listing permission or exemption based on such applications may not be in the interest of minority shareholders.
Mr. Manoj Kumar Vice President +919910688433 manoj@indiacp.com Keeping in views these observations, n…