Less than two years after approving the new takeover regulations, Securities and Exchange Board of India (Sebi) has decided to review the norms based on industry feedback. Experts, however, feel that any kind of review will lead to only a few minor changes in the regulations.
Speaking at a conference organised by the Financial Planning Standards Board, Sebi chairman UK Sinha said the process of reviewing the takeover norms has already begun as some industry participants have given their feedback.
“...We have started relooking at the implementation of the revised takeover regulations. Hopefully in the next couple of months or in the near future we will be making further progress... We have received some feedback and those will be given due consideration,” said Sinha on the sidelines of the event.
According to Sinha, the review is part of the overall exercise at Sebi’s end to make regulations investor-friendly and at the same time, stringent to avoid any unfair practices in the securities market.
“So far, as the regulation is concerned, over a period of two decades many of our regulations have evolved. They have been tightened and made investor friendly. At the same time we have been able to strike a balance between the needs of the industry and that of the end customer,” he said.
In July 2011, the board of the capital market watchdog approved the new takeover norms based on the recommendations of the Takeover Regulations Advisory Committee (TRAC). The new norms increased the open offer trigger limit to 25% from the then existing 15%.
Further, the minimum offer size was increased to 26% of the total issued capital from the then existing 20%.
Experts, meanwhile, say that any kind of Sebi review is likely to lead to only a few minor changes in the norms that govern all mergers and acquisitions (M&As)— activities in the country. They say the current norms are a result of an exhaustive consultation process that involved various market participants and it is too soon to expect significant changes.